Q2 2024 Infosys Ltd Earnings Call

Speaker 1: Ladies and Gentlemen,

Ladies and gentlemen.

Speaker 2: Good day and welcome to the Enforces Earnings Conference call.

Good day and welcome to the Infosys earnings Conference call.

As a reminder, all participant lines will be in listen only mode.

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I now hand, the conference over to Mr. Sandeep <unk> Haynesville.

Thank you and over to yourself.

Okay.

Hello, everyone and welcome to Infosys earnings call for Q2, FY 'twenty four.

Speaker 3: Hello everyone and welcome to Infosys on the call for Q2-FI24.

Speaker 3: Joining us here on this call is CEO and MD Mr. Salil Parekh, CEO Mr. Nilanjan Roy, and other members of the leadership team. We'll start the call with some remarks on the performance of the company for Q2.

Joining us here on this call as CEO and MD, Mr. Pelling, Paddick CFO and other members of the leadership team.

In fact, the call with some remarks on the performance of the company.

Speaker 3: followed by comments from Salil in the luncheon subsequent to which we'll open up the call for questions.

Followed by come in sometime in the London subsequent to which we'll open up the call for questions kindly note, but anything you can say because I forgot I'll go for the future is a forward looking statement, which must be read in conjunction with that is that the company faces a.

Speaker 3: Kindly note that anything we say with reference to our outlook for the future is a forward-looking statement, which must be read in conjunction with the risks that the company faces. A full statement explanation of these risks is available in the filings of the SEC, which can be found on www.sec.gov. I would now like to pass it on to Célène.

<unk> taken an explanation of these this is I've been living in the filings with the SEC, which can be found on www dot et cetera.

I'd now like to pass it onto silent.

Thanks Sandeep good afternoon. Good evening, good morning to everyone on the call. Thank you very much for joining us.

Speaker 3: Thanks Amdeep. Good afternoon, good evening, good morning to everyone on the call. Thank you very much for joining us.

Speaker 3: We've had a strong quarter in Q2. Our growth was 2.3% quarter on quarter and 2.5% year on year in constant currency. Our operating margin was at 21.2%.

We've had a strong quarter in Q2, our growth was two 3% quarter on quarter and two 5% year on year in constant currency.

Our operating margin was at 21, 2%.

Speaker 3: Large deals was at the highest ever for us at $7.7 billion and 48% of this

Large deals what is the highest ever for us at seven $7 billion.

And 48% of this was net new.

Speaker 3: Our Q2 large deals include 4 mega deals.

Our Q2 large deals include four mega deals.

Speaker 3: It does not include the MOU we signed and announced for $1.5 billion.

It does not include the Mou, we signed and announced for dollar $1 5 billion.

Speaker 4: We see that with our large deal wins in the past two quarters, we are winning market share in the area of cost, efficiency, automation, and AI.

We see that with our large deal wins in the past few quarters, we are winning market share in the area of cost efficiency automation and AI.

Speaker 4: This is a testament to our strong position as partner of choice for clients.

This is a testament to our strong position as partner of choice for clients.

Speaker 4: With a clear focus on client relevance, as the economic environment changed, we rapidly pivoted from delivering transformation projects to also delivering productivity benefits and cost savings at scale.

With a clear focus on client relevance as the economic environment changed.

Rapidly pivoted from delivering transformation projects to also delivering productivity benefits and cost savings at scale.

These large and Mega deal wins help us to build a strong foundation for our future.

Speaker 4: These large and mega deal wins help us to build a strong foundation for our future.

We continue to see the overall environment, where digital transformation programs and discretionary spend alu and decision making is slow this is impacting our volumes.

Speaker 4: We continue to see the overall environment where digital transformation programs and discretionary spends are low and decision making is slow. This is impacting our volume.

The adoption of Topaz I generally do AI capability set is helping us deliver more value and to increase market share.

Speaker 4: The adoption of Topaz, our generative AI capability set, is helping us deliver more value and to increase market share. We are currently working on over 90 generative AI programs. Our work is with proprietary and open source large language models.

We're currently working on over 90 generative AI programs. Our work is with proprietary and open source large language models.

Speaker 4: We continue to make investments in generative AI as we look to help our clients navigate the way forward with deep capability.

We continue to make investments in generative yeah, as we look to help our clients.

He gave the way forward with deep capability.

Speaker 4: We've trained 57,000 employees in generative AI.

<unk> 57000 employees and generating yeah.

We've announced the launch of a compensation review program for all employees effective November one.

Speaker 4: We've announced the launch of our compensation review program for all employees effective November 1.

Speaker 4: Our margin expansion program is being driven comprehensively across the company. We have five areas of focus.

Our margin expansion program is being driven comprehensively across the company, we have five areas of focus.

Speaker 4: pyramid, automation, critical portfolio, indirect cost and value. And it has 20 specific tracks within these five areas.

They didn't need automation critical portfolio of indirect cost and value.

And it has <unk>.

'twenty specific tracks within these five areas.

Speaker 4: We are delighted to welcome Rafael Nadal and Iga Sivatek as our brand ambassador.

We are delighted to welcome Rafael Nadal and you guys see right Tech as our brand ambassadors we.

Speaker 4: We are thrilled to be recognized on Cantor's list of most valuable global brands at number 64.

We are thrilled to be recognized on cantos list of most valuable global brands at number 64.

With the continued reduction in digital transformation programs and discretionary spend.

Speaker 4: with the continued reduction in digital transformation programs and discretionary spend, and the ramp up of our large and mega deals towards the end of our financial year.

Unknown Attendee: Ladies and Gentlemen, Good day and welcome to the Infosys earnings conference call. As a reminder, all participant lines will be in the lesson on the mod, and there will be an opportunity for you to ask questions after the presentation concludes. Should you be in the assistance during the conference call, please sign an operator by pressing star, then zero on your status on phone. Please note that this conference is being recorded.

And the ramp up of a large and mega deals towards the end of our financial year.

We are changing our growth guidance for this financial year to be growth of 1% to doing a half percent in constant currency.

Speaker 4: We are changing our growth guidance for this financial year to be growth of 1% to 2.5% in constant current.

Speaker 4: Our operating margin guidance for the financial year remains unchanged at 20 to 22 percent. With that, let me hand it to you.

Our operating margin guidance for the financial year remains unchanged at 20% to 22%.

Sandeep Mahindroo: I now hand the conference over to Mrs. Sandeep Mahindru. Thank you and over to you sir.

With that let me hand, it over to London.

Speaker 3: Thanks a little evening everyone and thank you for joining the call. Q2 revenue growth was 2.5% year-on-year and constant currency. Sequentially revenues grew by 2.3% in constant currency and 2.2% in dollar terms.

Thanks, Good evening, everyone and thank you for joining the call.

Unknown Attendee: Hello everyone and welcome to Infosys earnings call for Q2FI 24. Joining us here on this call is C.E.N.M.D.

Q2 revenue growth was two 5% year on year in constant currency.

Unknown Attendee: Mr. Sallal Parik, C.E.F.O. Mission in London Roy and other members of the leadership team. We'll start the call with some remarks from the performance of the company for Q2. Followed by a comment from Sallal in London subsequent of which we will open up the call for questions. Kindly note that anything we say with reference to our outlook for the future is a forward looking statement which must be read in conjunction with the rest of the company's cases. A full statement, the exclamation of these races available in the file is with the SEC. It can be found on www.sc.gov.

Sequentially revenues grew by two 3% in constant currency and two 2% in dollar terms.

Speaker 4: While we saw continuous softness and underlying volumes, levany for the quarter was supported by stronger growth in the balance, both folio and in true realizations from one time.

While we saw continued softness in underlying volume revenue for the quarter was supported by stronger growth in the balanced portfolio.

Ooh realization from one timers.

Speaker 3: H1 revenue growth was 3.3% in constant currency terms, and operating margins were at 21%, which is the midpoint of our guidance range.

It's one revenue growth was three 3% in constant currency and operating margins were at 21% because the midpoint of our.

Guidance, saying highlights.

Speaker 3: Highlight for Q2 was the large deal TCV of 7.7 billion, of which a sizable 48% was net new. Consequently, our H1 large deal TCV at 10 billion, which has already exceeded the total large deal signing for SI23. I will talk about it in more details later.

Highlight for Q2 was the largest D. C V. A $7 7 billion all Victor sizable 48% was nicknamed Consequently, I had one large deal T. C V at 10 billion because already exceeded the total logging fighting for a fight for any three I will talk about it in more details later.

Salil Parekh: I now like to pass it on to Sallal. Thanks Sandeep, good afternoon, good evening, good morning to everyone on the call. Thank you very much for joining us. We've had a strong quarter in Q2. I've growth was 2.3% quarter and quarter and 2.5% year-on-year in constant pregnancy. Operating margin was at 21.2%. Large deals was the highest ever for us at $7.7 billion and 48% of this was net new. A Q2 large deals include 4 mega deals.

Speaker 3: As announced in the previous quarter, we have launched Project Maximus, which is a margin improvement plan across five pillars and over 20 tracks. This program has been well received across the organization and we have been able to identify several new opportunities across the pillars.

As announced in the previous quarter, we have launched project Maximus, which is a margin improvement plan across five pillars I know what really attracts this program has been well received across the organization and we have been able to identify several new opportunities across the pillows.

Speaker 3: We have also seen some early benefits in some areas like utilization and optimization of overheads. We remain confident that this program will create a more meaningful impact on operating margins in the future.

You have also seen some early benefits in some areas like utilization and optimization of overhead.

We remain confident that this program will create a more meaningful impact on operating margins in the future.

Salil Parekh: It does not include the MOU resigned and announced for $1.5 billion. We see that with a large deal wins in the past two quarters. We are winning market share in the area of cost, efficiency, automation and AI. This is a testament to our strong position as partner of choice for clients. With a clear focus on client relevance, as the economic environment changed, we rapidly pivoted from delivering transformation projects to also delivering productivity benefits and cost savings at scale.

Speaker 3: Operating margins for Q2 were 21.2% and increase of 40 BPS sequentially bringing H1 margins to 21%.

Operating margin for Q2 was 21, 2% an increase of 40 bps sequentially, bringing it wasn't margin to 21%.

Speaker 4: Increase in operating margin sequentially was due to 0.5% from cost optimization benefits comprising of high utilization, pricing, etc. 0.3% from revenue one-timers, 0.1% from rupee depreciation, offset by 0.5% increase due to third-party costs, and by class, class, clouds are related to credit items intensifies.

The increase in operating margin sequentially was due to 0.5% from cost optimization benefit comprising of higher utilization striking a setup 0.3 per cent from revenue one timers.

0.1%, some reps who will be depreciation.

By 0.5%.

Due to third party costs related and other items.

Speaker 3: Client metrics remain strong with the number of $50 million in clients increasing to 80s and $100 million in clients at 39. Reflecting a strong ability to mind-stop clients that providing their multiple relevant service.

Client metrics remained strong with a number of $50 million 50 million clients and keep increasing to 18 and all of 100 million clients.

Salil Parekh: These large and mega deal wins help us to build a strong foundation for our future. We continue to see the overall environment where digital transformation programs and discretionary spends are low and decision making is slow. This is impacting our volumes. The adoption of TOPAS at generative AI capabilities set is helping us deliver more value and to increase market share. We're currently working on over 90 generative AI programs. Our work is with proprietary and open source large language models. We continue to make investments in generative AI as we look to help our clients navigate the way forward with deep capability. We've trained 57,000 employees in Generative AI.

39, reflecting a strong ability to mine top clients by providing them multiple they live in services.

Speaker 3: We are rolling out S524 compensation hikes for employee defective November 1st.

We are rolling out FY 'twenty full compensation for employees effective November four.

Headcount at the end of the quarter stood at 328000 employees a decline of 2.2% on the previous quarter.

Speaker 3: Headcount at the end of the quarter, to that 328,000 employees, a decline of 2.2% from the previous quarter, our focus on improving operating efficiency has resulted in an improvement of utilization, including training from 81.1% to 81.8%, which we believe at further room for further optimization.

Focus on improving operating efficiencies has resulted in an improvement of utilization excluding trainees from 81, 1% to 81, 8%, which we believe has further room for further optimization.

Speaker 3: long LTM attrition for Q2 reduced further to 14.6, while quarterly analyzed attrition was Than

LTM attrition for Q2 reduced further to a 14.6 light quarterly annualized attrition was flat sequentially flattish sequentially.

Speaker 3: The free cash flow for the quarter was robust at 670 million and the conversion to net profit for Q2 was robust at 89%. Unbilled revenues dropped for the second consecutive quarter and consequently this has partly led to an increase in DSO by 4 days sequentially to 67.

Our free cash flow for the quarter was robust at six 7 million in the conversion to net profit for Q2 was robust at 89%.

Unbilled revenues dropped for the second consecutive quarter and consequently, this has partly led to the increase in DSO by four days sequentially to 67 Consol.

Salil Parekh: We've announced the launch of our Compensation Review Program for All Employees, Effective November 1. A margin expansion program is being driven comprehensively across the company. We have five areas of focus, Pyramid, Automation, Critical Portfolio, Indirect Cost, and Value, and it has 20 specific tracks within these five areas.

Speaker 3: Consolidate cash and equivalent so that 4.2 billion at the end of the quarter, the board announced an interim dividend of rupee 18 and increased of 9.1% in compared to last year. EPS grew by 1.7% in dollar terms and 4.6% in rupee terms on a year on year basis.

Consolidated cash and equivalents stood at $4 2 billion at the end of the quarter. The board announced an interim dividend of rupees 18, an increase of nine 1% compared to last year E.

E. P. S grew by one 7% in dollar terms and four 6% in rupee terms on a year on year basis.

Speaker 3: Yield on cash balances was 6.7% in Q2. ROE was 30.9%. And improvement of over 8% under the current capital allocation policy started in FY20.

Yield on cash balances was six 7% in Q2, how do we what 39% an improvement of over 8% under the current capital allocation policy started in FY 'twenty.

Salil Parekh: We are delighted to welcome Rafael Nadal and Iga Sivatek as our brand ambassadors. We are thrilled to be recognized on Canter's list of most valuable global brands at number 64. With the continued reduction in digital transformation programs and discretionary spend and the ramp up of our large and mega deals towards the end of our financial year, we are changing our growth guidance for this financial year to be growth of 1% to 2.5% in constant currency. Our operating margin guidance for the financial year remains unchanged at 20 to 22%.

Speaker 3: We had an excellent outcome in our large deal win thanks to our strong client relationships and the relevance of our service offerings. We signed 21 large deals in Q2 including 4 mega deals.

We had an excellent outcome and a large deal win thanks to our strong client relationships and the relevance of our service offering we signed 21 large deals in Q2, including four Mega deal.

Speaker 3: As mentioned, the total large-deal PCB was 7.7 billion with a strong 48% net new. We signed six large deals in retail, five in manufacturing, four in telecom, three in FS, two in life sciences, and one in URS vertical. Region-wide, we signed 12 in America, eight in Europe , and one in ROW.

Mentioned, the total liability CV was $7 7 billion with a strong 48% mcnew resigned six large deals and retain five in manufacturing for in telecom three NFS do in life Sciences, and one in the U R. S electrical.

Region Wise, we signed 12 in America eat in Europe , and one in R. O W.

Speaker 3: Coming to a vertical segment performance, outlook continues to remain uncertain in financial services, sector with loadout in areas like mortgages, asset management, investment banking, cards and payment. Q2 growth was impacted by spend reduction in some large clients, which was partially offset by rampups of large deal wins in areas like cost optimization and vendor consolidation. We remain cautiously optimistic about medium-term outlook due to the movement to cloud led by increased need for real time insights and analytics.

Coming to vertical segments performance outlook continues to remain uncertain and financial services sector with slowdown in areas like mortgages asset management investment banking cards and payment due to growth was impacted by spend reduction in some large clients, which was partially offset by ramp ups of large deal wins in areas like cost optimization and vendor consolidation.

Nilanjan Roy: With that, let me hand it over to Nilangin. Thanks a little, good evening everyone and thank you for joining the call. Q2 revenue growth was 2.5% year-on-year in constant currency. Sequentially, revenues grew by 2.3% in constant currency and 2.2% in dollar terms. While we saw continued softness and underlying volumes, revenue for the quarter was supported by stronger growth in the balanced portfolio and through realizations from one time. H1 revenue growth was 3.3% in constant currency terms and operating margins were at 21%, which is the midpoint of our guidance range.

We remain cautiously optimistic about the medium term outlook due to the movement to cloud led by increased need for real time insights and analytics.

Speaker 3: Growth challenges and communication sector continues, coupled with increasing of expressions, risk of inflation, high interest rates, and supply demand imbalances are creating near-term uncertainties. The delays in decision-making continues, strong live deal signings, and pipeline will help support growth in medium-term.

Growth challenges and communications sector continued coupled with increasing opex pressures risks of inflation high interest rates and supply demand imbalances are creating near term uncertainty.

Delays in decision making continues.

Strong large deal signings and pipeline will help support growth in medium term.

Nilanjan Roy: Highlight for Q2 was the large DTCV of 7.7 billion, or which is sizable 48% was net new. Consequently, our H1 large DTCV is at 10 billion, which has already exceeded the total large deal signing for S523. I will talk about it in more details later.

Speaker 3: The recent deal with Liberty Global, reinstates up positioning as a lead and partnering with clients to provide significant savings as well as innovative ways to transform the landscape.

The recent deal with Liberty Global Reinstates, our positioning as a leader in partnering with clients to provide significant savings as well as innovative way to transform the landscape.

Speaker 3: URS clients are taking a conservative approach to discretionary spend, and the trend is likely to continue through the year. In energy, spending remains cautious due to the economic slowdown with focus on cost takeout and ROI. Utilities, especially in North America, continue to feed the pressure from high interest rates, resulting in delays in capital intensive programs. European utility players are continuing to make investments on legacy modernization.

You are if clients are taking a conservative approach to discretionary spend and the trend is likely to continue through the year.

In energy spending remains cautious due to the economic slowdown with focus on cost takeout and rois.

Nilanjan Roy: As announced in the previous quarter, we have launched predict Maximus, which is a margin improvement plan across five pillars and over 20 tracks. This program has been well received across the organization and we have been able to identify certain new opportunities across the pillars. We have also seen some early benefits in some areas like utilization and optimization of overheads. We remain confident that this program will create a more meaningful impact on operating margins in the future.

T there, especially in North America continued to feel the pressure from high interest rates, resulting in delays in capital intensive programs European utility players are continuing to make investments in legacy modernization.

Speaker 4: With the external and while the external environment continues to be volatile, manufacturing sector continued to show double digit growth year on year and Q2. Our capabilities in areas like digital transformation, cloud ERP, supply chain, smart factory, etc are resonating well with clients resulting in benefit.

With the external and while the external environment continues to be volatile manufacturing sector continued to show double digit growth year on year in Q2 our.

Our capabilities in areas like digital transformation cloud ERP supply chain Smart factory et cetera are resonating well with clients, resulting in benefits.

Nilanjan Roy: Operating margins for Q2 were 21.2% and increase of 40 BPS sequentially bringing H1 margins to 21%. Increase in operating margins sequentially was due to 0.5% from cost optimization benefits, comprising of high utilization, pricing, etc., 0.3% from revenue one-timers, 0.1% from revenue per depreciation, offset by 0.5% increased due to third-party cost salary related Operating Efficiency has resulted in an improvement of utilization, excluding training, from 81.1% to 81.8%, which we believe at further room for further optimization.

Speaker 4: with vendor consolidation in turn leading to stronger deal signings. While pressure on discretionary spend continues, there are opportunities in areas like infra, transformation, cost consolidation, etc. which is resulting into stronger pipeline.

With vendor consolidation and done leading to stronger deal signings.

While pressure on discretionary spend continues there are opportunities in areas like in fact transformation cost consolidation et cetera, which is what I was thinking just stronger pipeline.

Speaker 3: In the retail segment, budgets continue to remain tight with clients, continue to focus on budget consolidation, cost and efficiency. Interest on GenEI is growing and clients are evaluating our topaz offerings to modernize enterprise and refactor, re-engineer and deploy code.

In the retail segment, but it's continued to remain tight with clients continue to focus on budget consolidation cost and efficiency and restaurant Jamie is in growing and clients are evaluating our topaz offerings to monitor modernize their enterprise and re factor reengineering deploy code, while we had a very strong sequential growth in Q2, the underlying soft.

Speaker 3: While we are very strong with sequential growth in Q2, the underlying softness and volume and discretionary spends continue. We have revised revenue growth guidance for S522 to 1 to 2.5% in constant currency terms.

Missile volume and discretionary spends continue.

We have revised our revenue guidance for FY 'twenty two to one to two 5% in constant currency terms.

Speaker 3: Our deal signing and stock pipelines lays the foundation for acceleration and growth beyond FY24. We retain our margin guidance band for the year at 20-22%. With that, we can open up the call for questions.

D signing it starts with pipeline lays the foundation for acceleration and growth beyond FY 'twenty four.

We retain our margin guidance band for the year at 20% to 22%, but that we can open up the call for questions.

Speaker 2: Thank you very much. We will now begin the question and answer session.

Thank you very much.

We'll now begin the question and answer session.

Speaker 2: Anyone who wishes to ask a question may press star and one on their test on telephone. If you wish to remove yourselves from the question you may press star and two. But it's a test requested to use hands.

Anyone who wishes to ask a question you May press star and one on detached from telephone.

Nilanjan Roy: Long, NTM accretion for Q2 reduced further to 14.6, while quarterly annualized accretion was flat sequentially, flatish sequentially. Fresh, the free cashew for the quarter was robust at 670 million, and the conversion to net profit for Q2 was robust at 89%. Unbuilt revenue drops for the second consecutive quarter, and consequently this has partly led to an increase in DSO by four days' sequentially to 67. Consolidate cash and equivalent to that 4.2 billion at the end of the quarter, the board announced an interim dividend of rupee 18 and increased of 9.1% in compared to last year.

If it was to remove yourself from the question queue, you May press star two.

And sorry cluster to use handsets for asking a question.

Ladies and gentlemen for a moment, while the question queue assembles.

Okay.

Speaker 2: Our first question is from the line of Brian Bergin from Covent.

The first question is from the line of Bryan Bergin from Cowen. Please go ahead.

Speaker 5: Hi, good evening, thank you. So I wanted to just start with the growth guidance reduction. And I'm trying to understand if the reduction is more due to the delay of the large DRM's versus what you had expected three months ago, or if it's more due to incremental volume cuts in other program.

Hi, good evening. Thank you.

Wanted to just start with the <unk>.

<unk> guidance reduction and I'm trying to understand if the reduction is more due to the delay of the large deal ramps versus what you would have expected three months ago or if it's more due to incremental volume cuts and other program efficiencies.

Nilanjan Roy: EPS grew by 1.7% in dollar terms and 4.6% in rupee terms on a year on year basis. Ealed on cash balances was 6.7% in Q2, ROE was 30.9%, and improvement of over 8% under the current capital allocation policy started in FI-20.

Hi, Thanks for the question. This is selling well I think it's it's a combination of those volumes are.

Speaker 4: Hi, thanks for the question, Mrs. Salim. I think it's a combination of those points. There's

Nilanjan Roy: We had an excellent outcome in our large deal win thanks to our strong client relationships and the relevance of our service offering. Coming to a vertical segment performance, outlook continued to remain uncertain in financial services. Sector with load on in areas like mortgages, asset management, investment banking, cards, and payment. Q2 growth was impacted by spend reduction in some large clients which was partially offset by ramp-ups of large deal wins in areas like cost optimization and vendor consolidation.

There's.

The the way large program stopped all those delays are.

Speaker 4: The way large program start off, there's delays in starting them.

And starting them. There was also as people are signing these deals.

Speaker 4: There was also, as we were signing these, the cycle was a bit longer in closing them, so that had a bit of slowness.

The cycle was a bit longer.

Closing them, so that that had a bit of slowness and we are seeing discretionary spend.

Speaker 4: And we are seeing discretionary spend, which is coming down and we saw that continuing on transformation programs being slow that can continuing on in this quarter. So it was a combination of those.

Which is coming down and we saw that.

That continued continuing on our transformation programs are.

I'm being slow that can continuing on in this quarter. So it was a combination of those things.

Okay I appreciate the color and then just on margin on and understanding you have the wage increments that you just announced here.

Speaker 5: Okay, I appreciate the color. And then just on margin on, and understanding you have the wage increment that you just announced to your, but you also have margin tailwind through project maintenance. Can you give us some color on that? Where you're finding comfort within the margin range that you will fund to your today's side? I know you're up with the midpoint, you're through the first half. Do you expect to be above it? Well below that is you go through the second half.

But you also have margin tailwind through project maximum so can you give us some color on where you're finding comfort with him.

Nilanjan Roy: We remain cautiously optimistic about medium-term outlook due to the movement to cloud led by increased need for real-time insights and analytics. Growth challenges and communications sector continued, coupled with increasing up-expressors, risk of inflation, high interest rates, and supply demand imbalances are creating near-term uncertainties. Delays and decision-making continues, strong large deal signings and pipeline will help support growth in medium-term. The recent deal with Liberty Global reinstates up positioning as a lead-and-parkering with clients to provide significant savings as well as innovative ways to transform the landscape.

Margin range that you affirmed here today, so I know you're roughly at the midpoint even through the first half do you expect to be above or below that as you go through the second half.

Yeah.

Yeah. So like I said, we had a good quarter two and it is as I explained in my margin walk, but we only had a 50 basis points.

Speaker 4: Yeah. So like I said, we had a good quarter too. And as I explained in my margin walk, we only had a 50 basis point.

Speaker 3: improvement from our project maximus on cost optimization.

Improvement from a predict maximize on cost optimization.

Speaker 6: And that gives us comfort for the rest of the year and that the program is of course, this is a much longer program which will take not only into this year, into next year as well. We also realize that we have, you know, apparent

And that gives us comfort for the rest of the year and that the program is of course. This is a much longer program, which will take us not only into this year into next year as well. We also realize that we have.

Nilanjan Roy: URS clients are taking a conservative approach to discretionary spend and the trend is likely to continue through the year. In energy, spending remains cautious due to the economic slowdown with focus on cost take-out in ROI. Utilities especially in North America continue to feed the pressure from high interest rates resulting in delays in capital intensive programs. European utility players are continuing to make investments on legacy modernization.

Speaker 6: inefficiencies, utilization is still low. So these will go a help us and of course offset the wage hikes, etc. So we have a good program over the next, you know, 18 months to see where we end up. And of course, aspirations continue to be that to improve margins from where we are presently.

And inefficiencies that utilization is still low so easily go or help us kind of cost offset the the.

The wage hikes et cetera. So we have a good program over the next you know 18 months to see where we end up and of course aspiration to continue to be there to improve margins from where they are presently.

Thank you.

Thank you.

Yeah.

Speaker 2: The next question is from the line of Kavaljit Saluja from Kotak. Please go ahead.

The next question is from the line of cover Pizza Lucia from Cowen. Please go ahead.

Hi, Thank you.

Speaker 6: Hi, thank you. You know, I have a couple of questions. My first question is that can you quantify the revenue one timers and you know, are these revenue one timers in third party items bought for service delivery to clients or those are?

A couple of questions. My first question is that can you quantify the revenue are one timers and are these one timers in third party items bought per subject to claims or those are separate.

Nilanjan Roy: Ruzal Singh, into Stronger Pipeline. In the retail segment, budgets continue to remain tight, with clients continue to focus on budget consolidation, cost, and efficiency. Interest from Genie is in growing, and clients are evaluating our topaz offerings to modernize the enterprise and re-factor, re-engineer and deploy code. While we had a very strong residential growth in Q2, the underlying softness and volume and discretionary spends continue.

Uh huh.

Speaker 6: In the margin walk, we talked about 30 basis points impact on margin from revenue one-timer. So it's going to be around that figure of slightly more than that. So these are largely will fall through straight to margin. Here is the second part covered.

Could that be in the margin walk we've talked about 40 basis points impact on margin from revenue one time muscle, it's going to be around that figure out likely more than that these are largely even fall through straight to margin what are the second part comedy.

Speaker 6: Okay, the second part of the question is that can you detail out the verticals to which the mega deals belong? And, you know, the other question related to the deals is that normally you expect the direction of revenue growth and the deal wins to synchronize, whereas actually they are moving in the opposite direction. So what needs to change for the synchronization to happen again?

Okay. The second part of the question is that can you detail on the verticals to reach the mid <unk>.

Nilanjan Roy: We have revised our revenue growth guidance for FY22 to 1-2.5% in constant currency terms. Our deal signing is strong since pipelines lays the foundation for acceleration and growth beyond FY24. We retain a margin guidance band for the year at 20-22% with that we can open up the call for questions. Thank you very much.

And the other question related to.

And B is that normally you would expect the direction of revenue growth and our deal wins to synchronize submit and actually they are moving in the opposite direction. So what needs to change for the synchronization to happen again.

Yeah, So Kevin we don't give out you know which segments stomach ideal.

Speaker 6: Yes, so, Kavil, we don't give out which segments the mega deals are falling under.

Unknown Attendee: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their test on telephone. If you wish to remove yourself from the question, you may press star and two. Participants are requested to use handsets for asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Alejandro.

Speaker 6: The second part was you were saying revenue and large deal announcement synchronized, is that the question? Yeah, absolutely. I mean, they seem to be moving in different directions. I mean, with the $7.7 billion mega, large deals win, you would have expected a happier picture on growth outlook, whereas, you know, things seem to have changed there. So what needs to change for the synchronization of growth and how the deal wins and growth to happen?

The second part was your thing Beverly.

Revenue and large deal announcements and connect with that the question.

Yeah, absolutely I mean, they seem to be moving in different direction.

Seven $7 billion Meg to me you know resides deals when you are not expecting a happier picture on growth outlook, whereas things seems to have changed here. So on what needs to change for the synchronization of growth and R&D.

Bryan Bergin: The first question is from the line of Brian Bergen from COVID. Please go ahead. Hi, good evening. Thank you. I wanted to just start with the growth guidance reduction. I'm trying to understand if the reduction is more due to the delay of the large DRM's versus what you had expected three months ago, or if it's more due to incremental volume cuts in other program efficiencies. Hi, thanks for the question. This is Salil.

However, these wins and growth to happen.

Sure. So I think one is of course Mega deal. As you know are you know both timing are they have a runway well firstly in some cases they may have re badging. So that's the time it takes sometimes a regulatory approval. So you can't even do people transfer and then of course, there's a transition period.

Speaker 6: So I think one is of course mega deals as you know, you know, post signing, they have a runway in terms of firstly in some cases they may have rebadging. So that's a time it takes sometimes they have regulatory approval, so you can't even do people transfer. And then of course, there's a transition period. And then of course, post transition, then of course, you know, there is a transformation element for a run.

And then of course, both transition than a thought there.

It is a transformation element or a run. So these are all steps in the process and as you can imagine being such large deals these cannot.

Speaker 6: So these are all steps in the process. And as you can imagine, being such large deal, these cannot, you know, over-write be, you know, turned on in terms of us taking over the entire landscape, et cetera, but definitely planned through entirely. And therefore, you know, it takes a couple of quarters before they start, uh, you know, bleeding, uh, into the revenue figures. And like I said, this will set us up well.

Bryan Bergin: I think it's a combination of those points. There's the way large programs start off, there's delays in starting them. There was also, as we were signing these deals, the cycle was a bit longer in closing them, so that had a bit of slowness. We are seeing discretionary spend which is coming down and we saw that continuing on transmission programs being slow, that continuing on in this quarter. So it was a combination of those points.

I'd be turned on in terms of us taking over the entire landscape profitably after we plan through entirely and therefore it.

It takes a couple of quarters before they start.

Bleeding into the revenue figure then like I said this will set us up well for FY 'twenty five fundamentally and as <unk> said in the near term.

Speaker 6: for FY25 fundamentally. And as Anil said, in the near term, in the quarter, there is of course the underlying volume sluggishness.

In the quarter. There is of course, the underlying volume sluggishness AR and what we have to recognize that part of rebuilding our forecast for this year.

Speaker 6: And of course we have to recognize that part as we build in our forecast for this year.

Okay, and what's the deal pipeline like comfortably we think the conversion of pipeline into a mega deal. So you know how does the pipeline look like I mean is it significantly lighter or those be remarkably strong.

Speaker 7: Okay, what's the deal pipeline like after the recent conversion of pipeline into a mega deal? So how does the pipeline look like? I mean, is it significantly lighter or does it stay remarkably strong?

Salil Parekh: Okay, appreciate the color. And then just on Mars and on, and understanding you have the wage increment that you just announced to your, but you also have margin tailwind through Project Maximus. Can you give us some color on that? Where you're finding comfort within the margin range that you will fund to your today? Sorry, I know you're up with the midpoint here through the first half. Do you expect to be above or below that as you go through the second half?

Speaker 6: It's a strong pipeline, of course, with 7.7 and I think it can't be higher than the previous quarter. But it's a very strong pipeline and of course we will continue to have enough in the funnel to start refilling.

It's a strong pipeline across the Kevin Kevin and I took them to do a grand piano.

Salil Parekh: Yes, so like I said, we had a good quarter too and as I explained in my margin was, we nearly had a 50 basis points improvement from our project maxima on cost optimizations and that gives us comfort for the rest of the year and that the program is of course, this is a much longer program which will take not only into this year and to next year as well. We also realize that we have you know, apparent inefficiencies, utilization is still low.

<unk> be higher than the previous quarter, but it's a very strong pipeline in the past we will continue to have enough in the final two you're gonna start refilling. This.

Okay, just a final question on <unk>.

Speaker 7: Just a final question on deals. I think the past experience of mega deals and the transition of that into profitability has not been very encouraging. But if I look at your comments and Sal's comments, all of you have highlighted that your

Deals.

In the past experience of <unk> and the transition of that into profitability has not been very encouraging.

But if I look at your comments and <unk> comments, although if you have highlighted that our yards.

Speaker 7: profitability aspiration is to improve your profit. You want to improve your profitability.

Profitability aspiration is to improve your property do you want to improve your profitability not at the same time you have those mega deals as.

Speaker 7: Now at the same time you have those mega deals as well. So how does the profitability dynamics play out, especially given the past content.

So how does the profitability dynamics play out.

Especially given the past context.

Speaker 6: So, Kavil, as you know better than anybody else, when we set out the large deal strategy more than 5 years back, we were close to about 21% margin. We have signed probably 50 billion dollars plus of large deal and today we are 21, 21.2. So, we have not seen any margin erosion because of the large deal strategy. I do not really recognize...

So a couple that you'd know better than anybody else and when we set out the large deal strategy more than five years back we were close to about 21% margin.

We have signed probably $50 billion plus of large deal adding to leave you out to anyone for any one two so we've not seen any margin erosion because of the large deal strategy right. We recognized over all these periods and this experience with rehab we will sign on these larger deals of course upfront.

Salil Parekh: So, these will go a help path and of course offset the wage hikes, etc. So, we have a good program over the next you know, 18 months to see where we end up and of course aspirations continue to be that to improve margin from where we are presently.

Unknown Attendee: Thank you.

Speaker 6: over all these periods and this experience which we have, we will sign on these large deals. Of course, up front they will have margin pressures and from a portfolio perspective as you look in the deal tenures, we have our experience to say how we can improve the margin of the deal from day one.

We'll have margin pressures.

And from a portfolio perspective as you look at the deal we have our experienced to say how we can improve the margin of the deal from day, one button, saying five I mean, the way that the portfolio, we are able to rotate our Gordon get built at the same time with our cost optimization programs make these deals are put forth.

Kawaljeet Saluja: The next question is from the line of Kavaljit Salucha from Kota. Please go ahead. Hi, thank you. You know, I have a couple of questions. My first question is that can you quantify the revenue or one-timers and you know, are these revenue one-timers in third-party items bought for service delivery to clients or those are separate? In the margin, what we talked about 30 basis points impact on margin from revenue one-timers. So, it's going to be around that figure slightly more than that.

Speaker 7: in year 5. And in a way that's the portfolio we are able to rotate, go and get deals. At the same time with our cost optimization programs make these deals approach portfolio margins. And like I said the proof of the pudding is in the eating. 50 billion dollars of large deals later are margins where they were.

Kawaljeet Saluja: So, these are largely will fall through straight to margin. What is the second part, Kavaljit? Okay. The second part of the question is that can you detail all the verticals to which the mega-d is bizarre and you know, the other question related to the and deals is that normally you expect the direction of revenue growth and the deal wins to synchronize, whereas actually they are moving in the opposite direction. So, what needs to change for the synchronization to happen again? Yeah.

For your margin.

And I mean like I said the proof of the pudding is meeting $50 billion of largely insulate our margins are where they were.

Okay sure. Thanks, Yeah, Thanks, a lot.

Yeah.

Thank you.

Speaker 2: The next question is from the line of Moshe Katti from Red Bush.

The next question is from the line of Moshe <unk> from Wedbush Securities. Please go ahead.

Hey, Thanks, and congrats on very strong PCB bookings for the quarter.

Speaker 5: Thanks and congrats on very strong TCB bookings for the quarter.

<unk>.

Speaker 5: So if we're trying to kind of figure out the conversion pace of some of those large deals that I mean I guess at this point it seems that

So what we're trying to kind of figure out the conversion pace with some of those large deals that I.

I mean, I guess at this point it seems that.

We haven't seen a lot of that conversion happen, but when do we start seeing that reflected better topline growth.

Speaker 5: We haven't seen a lot of that conversion happen, but when do we start seeing that reflected in better top-line growth? Is it March quarter next year? It could be the quarter when we could actually see better costs for top-line growth because of those conversions? Is that the right way of looking at it?

March quarter next years tend to be the quarter, where we could actually see better.

Kawaljeet Saluja: So, Kavaljit, we don't give about, you know, which segments the mega-deals, you know, are falling under. The second part was your thing, where will you revenue and the large deal announcement synchronize? Is that the question? Yeah, absolutely. I mean, they seem to be moving in different directions. I mean, you know, I mean, with the $7.7 billion mega-d, you know, large deals win, you would have expected a happier picture on growth outlook, whereas, you know, things seems to have changed there.

Comps for topline growth because of those conversions is that the right way of looking at it.

Yeah.

So there are a number of deals in the pipeline some will start in Q4.

Speaker 6: So there are a number of deals in this pipeline. Some will start in Q4. Some which we signed last quarter have already started coming a bit of that into Q3. So it's not like one day we suddenly have these 21 deals which of course have rebids inside. So they are phased and in terms of even ramp ups you will see it's not that you hit the run rate on the day of the revenue booking. Some of them take a longer period. So it's a combination of all that.

Some which we signed last quarter have already started coming a bit of that into Q2. So it is it's not like one you know one day, we suddenly have these 21 deals so far have rebids inside.

Kawaljeet Saluja: So, what needs to change for the synchronization of growth and not a deal wins and growth to happen? Sure. So, I think one is, of course, mega-deals, as you know, you know, both signing, they have a runway in terms of firstly, in some cases, they may have rebadging. So, that's a time it takes. Sometimes they have regulatory approval, so you can't even do people transfer. And then, of course, there's a transition period and then, of course, both transition, then, of course, you know, there is a transformation element or a run.

So it would be a phased in in terms of even ramp up so you'll see it's not that you know that.

You hit the run rate you know on the day of the revenue booking right some of them take a longer period. So it's a combination of all that.

Speaker 5: Okay. And these are, just to be clear, these are deals that are funded with calendar 23 budgets. You don't need calendar 24 budgets to continue funding these deals. Is that the right way of looking at it as well?

Okay. When do we and these are just to be clear. These are deals that have some bids would the calendar 'twenty three budgets you don't need to.

Tony for budget to continue funding. These deals is that the right way of looking at it as well.

I'm, sorry can you repeat that I couldn't do something I couldn't hear you hear that Moshe.

Kawaljeet Saluja: So, these are all steps in the process. And as you can imagine, being such large deals, these cannot, you know, override, be, you know, turned on in terms of us taking over the entire landscape, etc. So, they have to be planned too entirely. And therefore, you know, it takes a couple of quarters before they start, you know, bleeding into the revenue figures. And like I said, this will set us up well for FY-25 fundamentally.

Speaker 4: Sorry, can you repeat that? I couldn't hear that.

Speaker 5: Yes. So the deals that you won this year are funded with calendar 23 budgets. I just want to confirm that i.e. you don't really need the approval calendar 24 budgets to continue funding these deals. Is that the right way of looking at it?

Yes.

The deals that you won this year are funded with calendar 'twenty three budgets I just wanted to confirm that you don't really need the approval of calendar 'twenty for budgets to continue funding these deals.

That the right way of looking at it.

Kawaljeet Saluja: And as Alil said, you know, in the near term, in the quarter, there is, of course, the underlying volume sluggishness. And of course, we have to, you know, recognize that part as we build in a forecast for this year. Okay, what's the deal pipeline like after the recent conversion of pipeline into a mega deal? So, you know, how does the pipeline look like? I mean, is it significantly lighter or does it stay remarkably strong?

Speaker 6: Yeah, so it's, you know, they are already come out of existing budgets, but you know, many of these are actually cost takeout programs in this environment, right? Vendor consolidation, cost takeout. So actually we are giving money back in a way to the organization, which is why in a way we are winning these deals, right?

Yeah. So it's.

They're already come out of existing budgets, but you know many of these are actually cost take out programs in this environment right vendor consolidation cost takeout. So actually we are giving money back to the organization, which is why in a way if you have anything these days right.

Yep.

Speaker 5: Yep, good. And then the final question, do you have any view, maybe so little can talk about that, about calendar 24 budget cycle that probably should start maybe by next month? Do we feel that the budget cycle is going to be on time you think there's only budget delays, which is what happened earlier this year? What what are you seeing at this point based on some of the quiet conversations that you're having? Thanks a lot.

And then the final question do you have any view, maybe so that we can talk about that about calendar 'twenty for the budget cycle, that's probably should start would be by next month.

We feel that the budget cycles are going to be on time, you think there's going to be budget delays, which is what happened earlier. This year. What what are you seeing a disciplined based on some of the conversations that you're having.

Kawaljeet Saluja: You know, I think the past experience of mega deals and the transition of that into profitability has not been very encouraging. But, if I look at your comments and sales comments, all of you have highlighted that your profitability aspiration is to improve your profit, you want to improve your profitability. Now, the same time you have those mega deals, you know, as well. So, how does the profitability dynamics play out, you know, especially given the past context?

Both spot.

Thanks, Yeah. This is <unk>.

The way we are seeing the client conversations today.

Speaker 4: The way we are seeing the client conversations today, we don't see a change that's come about.

We don't see a change that's come about.

Speaker 4: there's a lot of constraints with clients, whether it's on transformation programs or discretionary projects, which are significantly reduced or slowed down. So that thinking is continuing on. As you pointed out over the next.

There is a lot of constraints with clients, whether it's some transformation programs are discretionary projects, which.

Our significantly reduced or slow down so that thinking is continuing on.

Salil Parekh: So, covered as you know better than anybody else, you know, when we set out the large deal strategy, more than five years back, we were close to about 21 percent margin. We have signed probably $50 billion plus a large deal and today we are, you know, 21.2. So, we've not seen any margin erosion because of the large deal strategy, right? We recognize over all these periods and this experience which we have, we will sign on these large deals.

As you pointed out over the next few weeks, we will get a better sense if that's changing.

Speaker 4: few weeks we will get a better sense.

Speaker 4: if that's changing, either improving or not for the following year. But at this stage, that's the mindset we are seeing. And there's that attention on cost.

Either.

Improving or not for the following year, but at this stage. That's the mindset, we have seen and that attention on cost and efficiency, which also continues as.

Speaker 4: and efficiency which also continues as we are seeing in discussion.

Salil Parekh: Of course, upfront, they will have margin pressures and from a portfolio perspective as you look in the deals and you all, we have an experience to say how we can improve the margin of the deals from day one versus in year five. And in a way, that's the portfolio we are able to rotate, go and get deals at the same time with our cost optimization programs, make these deals approach portfolio margins. And I mean, I said the proof of the pudding in the eating, $50 billion of large deals later, margin, where they were. Okay, sure. Thanks. Thanks a lot. Thank you.

As we have seen the discussion so the conversations that we've been having over the last few months is the same tone in D. C is there going to be end of deal for next year's budgeting, we don't see a change in that at this stage.

Speaker 4: The conversations that we've been having over the last few months is the same tone we see as they go into the end of the year for next year's budgeting. We don't see a change in that at this stage.

Understood. Thank you.

Thank you.

Speaker 8: The next question is from the line of Kumar Rakesh from BNP Paribas. Please go ahead.

The next question is from the line of command Rockies from BNP Paribas. Please go ahead.

Hi, Good evening. Thank you for taking my question my.

My first question Phil.

Chris to speak up a bit to get an audience.

Yeah. He's Mcdonald, Yes go ahead please.

Thank you. So my first question was around the volume performance during the quarter you did talk about that it is under pressure and last quarter also you had talked about.

Speaker 8: So, Selin, my first question was around the volume performance during the quarter. You did talk about that it is under pressure and last quarter also you had talked about. So, during the quarter how the volume performance you sought through the quarter was it further deteriorating since where we saw last quarter and is your guidance implying that there would be further deterioration outside of the seasonal team the coming two quarters.

Unknown Attendee: The next question is from the line of Mohshaikati from Red Push Securities. Please, go ahead. It thanks and congrats on very strong TCB bookings for the quarter. So, if we're trying to kind of figure out the conversion pace of some of those large deals that, I mean, I guess at this point it seems that we haven't seen a lot of that conversion happened. But when do we start seeing that reflected in better top line growth?

So during the quarter, how the volume performance useful so through the quarter or was it due to anything since maybe you saw in last quarter and your guidance, implying that there would be further deterioration outside of the seasonality in the coming two quarters.

Speaker 4: So the volume specifics, I didn't share, I mentioned that there was continued constraints or pressure on that. What is happening if you step back a little bit is.

So the volume specifics.

Sure I mentioned that there was a continued constrains our pressure on that.

Unknown Attendee: There's a March quarter next year that can be the quarter where we could actually see better cost for top line growth because of those conversions that the what we are looking at. Yeah, so there are a number of deals in this pipeline. Some will start in Q4. Some which we signed last quarter have already started coming a bit of that into Q3. So, it's not like one day we suddenly have this 21 deal, so it's of course, a wee bit inside.

What is happening.

If you step back a little of it is.

Speaker 4: There's impact on revenue which is from slowing or stopping of discretionary work and all the transformation programs. And then we have on the other hand with the large and mega deals, some of those starting off that giving us benefit on the revenues.

There's impact on revenue, which is from slowing or stopping of discretionary work.

And all of the transformation programs and then we have on the other hand.

With the large and Mega deals some of those starting all that giving us.

Benefit on the revenue side. So Debbie you saw the volume constrained from the first first part of that in this quarter.

Speaker 4: So there we saw the volume constrained from the first part of that in this quarter. In the coming quarter, you know that well, we will have in Q3 the usual seasonal impact with the end of the calendar holidays and so on. And typically for us, for enforcers.

Unknown Attendee: So, they are faced, you know, and in terms of even ramp up, you will see it's not that, you hit the run rate on the day of the revenue booking. Some of them take a longer period. So, it's a combination of all that.

In the coming quarters, you know that well we will have in Q3, the usual seasonal impact with the end of the calendar year holidays and so on.

Typically for us for Infosys Q3, and Q4 are softer quarters in any case, we anticipate that we don't have a view.

Speaker 4: Q3 and Q4 are softer quarters in any case. We anticipate that we don't have a view which is different from that. That's how we are looking at it going in. But these things are,

Which is different from that that's how we're looking at it going in but these things are.

Uh huh.

Speaker 4: changing as we go through each quarter. So we will fortunate we deliver a very strong quarter. But we are just as we look out, we can see the pressures with the clients. And that's what gives us the reason to be watchful on both those.

Changing as we go through each quarter. So we were fortunate we delivered a very strong quarter.

Unknown Attendee: Smeet Jain, Smeet Jain, Smeet Jain, Smeet Jain, Smeet Jain, Smeet Jain, Smeet Jain Smeet Jain[inaudible] Smeet Jain, Smeet Jain So, the volume specifics, I didn't share, I mentioned that there was continued constraints or pressure on that. What is happening, if you step back a little bit is, there's impact on revenue which is from slowing or stopping of discretionary work and all the transformation programs and then we have on the other hand with the large and mega deals some of those starting off that giving us benefit on the revenue side.

But we are just as we look out we can see the pressures with the clients.

That's what gives us.

The reason to be watchful on both those sides.

Thanks for that my second question was during the first one since you did talk about that enforcement is working on proprietary large languish Martin sort of clarification is are these models that you're working on enforces these planes.

Speaker 7: My second question was during the first one since you did talk about that, and for this is working on proprietary, large language models. So clarification is, are these models that you're working on, and for this own or these are for clients or your ecosystem partners, and what kind of models use cases and data that you're using for them? So there.

Our yard so ecosystem partners and what kind of more of a few skus Suzanne do you think youre using for them.

So then what I was referring to was.

Proprietary models from our partners. So we are not developing a large language module of Ireland. We are working as you know again that a.

Speaker 4: proprietary models from our partners. So we are not developing a large language model of our own. We are working as you know again, there are a large number of these models which are already in the market. Some of them are proprietary and some of them are open source. We are working with both types of those models.

A large number of these models, which are already in the market. Some of them are proprietary and some of them are open source. We are working with both types of those models.

Speaker 4: Typically, we are working in what's called the narrow transformer approach, which really we start to see datasets, which are a little bit more...

Typically we are working in what's called the narrow transformer approach, which really we start to see data sets, which are a little bit more.

Speaker 4: Enterprise-focused, which allow enterprise a large client to take advantage of that data set for their own activity. And the applications, again, you probably seen that. We are seeing applications on, of course, software development on tech.

Enterprise focused.

Which allow enterprise.

Large clients to take advantage of that dataset for their own activity.

The applications again, you you you probably seen that we are seeing applications on of course software development on text.

Speaker 4: on voice, on video. So we are seeing applications today on all of these areas, actually working on all of these areas. And that...

On voice and video so we are seeing applications today on all of these areas actually be working on all of these areas and that is.

Speaker 4: is for the client and then we're doing some work inside Infosys as well for our own activities.

As for the clients and then we're doing some work inside infosys as well for our own for our own our own activities.

Got it thanks, that's very helpful.

Thank you.

Speaker 2: The next question is from the line of Sandeep Shah from Eucharist.

The next question is from the line of Sandeep Shah from <unk> Securities. Please go ahead.

Speaker 3: Yeah, thanks, thanks for the opportunity. The first question is, in your opening remarks, you mentioned that the mega deal wins and the first order book signing will help us to accelerate the growth in the beyond F-24. So is it fair to say most of the deal wins of this year will have a solid support in terms of the growth? Pick up in the F-25.

Yeah. Thanks, Thanks for the opportunity.

Last question is no.

In your opening remarks, you mentioned back the Mega deals tend to be even stronger book signing didn't help us to accelerate the growth in the beyond the filing before but is it fair to say most of the buildings Lucia didn't have salt Lake supporting don't.

Pick up and be a fight with the fight.

Speaker 6: Yeah, I mean, these will translate into revenue one day. So like I said, they will start in FI-25 and like somebody else answered. Of course, not like on one certain day they all start together. So they will have a run up, but absolutely they are. We'll, some of them will start even sooner in FI-24 towards the Fagin.

Yeah, I mean, these will translate into revenue one day. So like I said they are in fact in FY 'twenty, five and let somebody else out in front of call. It sounded like on one of them. They all talk together. So they will have a run up but absolutely I mean, some of them, it's not even sooner than that when he talked about the fact that.

Okay.

Yeah.

Sandeep, just a question and answer.

Okay.

Yes.

Thank you for that.

Speaker 2: Thank you. We move to the next question that is from the line of Nathan Padmanaban fromrovineVashtay please go it

Next question is from the line of Nathan monopoly from Investec. Please go ahead.

Yeah, Hi, good evening and thank you for the opportunity.

Speaker 9: So one is on discretionary spend.

I had two questions. So one is on these things.

Speaker 9: As yesterday, I think your peer had mentioned that

S J I think.

Unknown Attendee: So there we saw the volume constrained from the first part of that in this quarter. In the coming quarter you know that well we will have in Q3 the usual seasonal impact with the end of the calendar holidays and so on and typically for us for Infosys Q3 and Q4 are softer quarters in any case. We anticipate that we don't have a view which is different from that. That's how we are looking at it going in.

You had.

<unk> that.

They don't think discretionary spends recovery went in 2024.

Speaker 9: They don't think discussion is spent recover even in 2024. Just wanted your thoughts on how are you thinking about this overall? And in the context.

Just wanted your thoughts on how long do you.

Thinking about this overall.

And in the context of this well we have seen very strong deal wins.

Speaker 9: Well, we have seen very strong deal wins this time around and obviously those are deals that would have been under the hood for maybe the last 12 months which are all

I'm around and obviously those are deals that would have been.

Under the Hood for maybe the last 12 months, which are all closed.

Speaker 9: When you look at it going forward, do you think that

When you look at it going forward.

Unknown Attendee: But these things are changing as we go through each quarter so we will fortunate we deliver a very strong quarter but we are just as we look out we can see the pressures with the clients and that's what gives us the reason to be watchful on both those signs.

Do you think that deal activity per se.

Speaker 9: De-lactivity per se could sort of slow down. Is there a risk there?

Good sort of slow down is there a risk there.

Speaker 9: or if you give some context in terms of pipeline versus how it was before these deals close and how is it today. Is there a lot of replenishment that needs to be done to reach back the same level?

Or if you could give some context in terms of pipeline versus how it was before.

Before these deals closed and how is it today.

Is that a lot of replenishment that needs to be done to leach pad at the same level.

Unknown Attendee: Thanks for that. My second question was during the press conference you did talk about that in Infosys is working on proprietary large language models. So clarification is are these models that you are working on? Infosys own or these are for clients or your ecosystem partners and what kind of models use cases and data that you are using for them. So there what I was referring to was proprietary models from our partners.

That's the first question.

Speaker 4: So on the first part, we don't have a view on financial year 24 in terms of volume and so on. What we are sharing today is what we are seeing, what we've seen, for example, in Q2, and what we observe from that, keeping in mind some of the seasonality of this coming quarter and the end of our financial year.

So.

On the first part.

We don't have a view on our financial year 'twenty four.

In terms of volume and so on what we are sharing today is.

<unk>, what we've seen for example in Q2.

What we observed from that keeping in mind some of the seasonality of this coming quarter.

Unknown Attendee: So we are not developing a large language model of our own. We are working as you know again there are a large number of these models which are already in the market. Some of them are proprietary and some of them are open source. We are working with both types of those models. Typically we are working in what's called the narrow transformer approach which which really we start to see data sets which are a little bit more enterprise focused which allow enterprise a large client to take advantage of that data set for their own activity and the applications again you probably seen that.

The end of our financial year.

On the <unk>.

Speaker 4: pipeline or deal activity. As the London was sharing, we see a good pipeline. Of course, the deals we have closed have come off, of the pipeline, come out of the pipeline. But it's still a good pipeline for us. There's a lot of interest from clients.

ZIP line or deal activity.

As the London was shedding we see a good pipeline of course the deals we have closed have come off of the pipe come out of the pipeline, but it's still a good pipeline for us there's a lot of interest from clients in cost and efficiency and automation, which is where many of these.

Speaker 4: in cost and efficiency and automation, which is where many of these large and mega deals have come in. There's a good interest in consolidation, which is where some of those deals have come in. And we continue to gain market share in that, so we feel good about it. And there is that continuing interest in that type of work.

This large and Mega deals have come in there's a good interest in consolidation, which is where some of those deals have come in.

And we continue to gain market share in that so we feel good about it and there is that continuing interest in that type of work.

Sure.

Speaker 9: The second question was the underlying assumption on the guidance, if I understand right, is that the revenue accretion from these large deals will be very meniscule this year, and you have events on the discretionary side. The bigger accretion should really happen maybe next year. So this year is very meniscule, that's a very fair assumption.

The second question was.

Unknown Attendee: We are seeing applications on of course software development, on text, on voice, on video. So we are seeing applications today on all of these areas actually working on all of these areas and that is for the clients and then we are doing some work inside Infosys as well for our own for our own activity.

The underlying assumption on the banking.

If I understand right is that the revenue accretion from these large deals to be very miniscule.

And you have headwinds on the discretionary side.

<unk> begun a Christian so rarely happened maybe next year. So this year. It is very miniscule that that's sort of any fed assumption.

Unknown Attendee: Gaurit Pank, that's very helpful.

Speaker 6: Yes, I am going on. The definition is, you can vary the definition of miniscule can be quite different, but yes, I mean, it's more largely in F525.

Yes.

Okay.

You can vary the definition of miniscule can be quite different but yes, I mean, it's more than largely an FY 'twenty side absolutely yes.

Unknown Attendee: Thank you.

Nilanjan Roy: The next question is from the line of Sandeep Shah, from Echuristic entities, please go ahead. Yeah, thanks for the opportunity. The first question is Nilanjan in your opening remarks, you mentioned that the mega deal wins and the first order book signing will help us to accelerate the growth in the beyond F524. So, is it fair to say most of the deal wins of this year will have a solid support in terms of the growth pick up in the F525?

Speaker 9: So I meant on a quarterly run rate basis, would it be minus QL, of that coming into the revenue versus what you originally thought? That was the context.

Yeah, that's what I meant on a quarterly run rate basis would it be miniscule.

All of that coming into the revenue versus what you originally thought.

That was the contract.

Yep.

Sure Fair enough.

Speaker 9: So enough. And lastly, in terms of the headwinds on discretionary, which verticals really stand out in terms of where you are seeing the maximum pressure, that's the last.

And lastly.

In terms of headwinds on discussion with verticals really standout in terms of radios in the maximum pressure.

Last question. Thank you.

I think you mentioned the three verticals are I think you can see it both sequentially you can see a year on year you can see at the peer group.

Speaker 6: Yeah, I think it's, we mentioned the three verticals. I think you can see it both sequentially. You can see it here on here. You can see it with the peer group. It is financial services. It's mortgage, it's asset management, it's parcel retail, it's communication. And I don't think we are any different from, you know, any of our peers, I think everybody's calling out these three verticals as being soft.

Nilanjan Roy: Yeah, I mean, we will translate into revenue one day. So, like I said, they will start in F525 and like somebody else answered of course, not like on one day they all talked together. So, they will have a run up, but absolutely they are, we will some of them start even sooner in F524 towards the Fagin.

Financing services, it's smart Gateway, Patrick my mandate parts of retail and communication.

I don't think we are any different from.

Any of our peers I think everybody is calling out these three verticals as being soft.

Sure Fair enough. Thank you so much and I'll leave it there.

Unknown Attendee: Sandeep is a question answer. Thank you.

Thank you.

The next question is from the line of LIBOR singer from Nov on my equity. Please go ahead.

Speaker 2: The next question is on the line of the board single from the Vama Equities.

Nathan Padmanaban: We move to the next question that is from the line of Nathan Padmanaban from Investek, please go ahead. Yeah, hi, good evening and thank you for the opportunities. I had two questions.

Yes, hi, Thanks for taking my question Southern block.

Speaker 3: Yeah, thanks for picking my question. So, good luck. This is a question from my side.

Two questions from my side.

Nathan Padmanaban: So, one is on discretionary pens. As yesterday, I think you have here had mentioned that they don't think discretionary pens recover even in 2024. Just wanted your thoughts on how are you thinking about this overall? And in the context of this, well we have seen very strong deal wins this time around and obviously those are deals that would have been under the hood for maybe the last 12 months, which are all closed.

Speaker 3: which fabric the year will be the guidance of all the certain questions for a five and a four. And we'll probably sit down within that four guidance six in time to send it on.

All of these topics.

Those items will focus on infill Southern Florida, Florida and.

Within that guidance.

Speaker 3: So just, I mean, in the last call, to call these had mentioned that maybe in the first guidance, there was an assumption, which is not layout and we had a pair with a comparative one, but it's a one, two, three, point, type of questions, I guess, which we had given last time.

So just I mean in the last call just falls and you had mentioned that.

Maybe in the first item.

There was an assumption which is not.

Anthony.

You had a tangible something like this.

Well one thing.

He had enough time.

Speaker 3: So just want to understand that, I mean, we have been living good lives all along, especially in this quarter. And as you mentioned, that's more than some of the views at any time. So what has changed from the time that we raise the first guidance to this time in terms of the project that we have, that we are already wearing these.

Just wanted to understand that.

We have been building these all along especially in this model.

You mentioned that normally have someone who can put anything so what has changed from the bank.

Instead this thing in terms of the products that we have.

Nathan Padmanaban: When you look at it going forward, do you think that deal activity per se could sort of slow down? Is there a risk there? Or if you give some context in terms of pipeline versus how it was before these deals close, then how is it today? Is there a lot of replenishment that needs to be done to reach back the same level? Yeah, that's the first question.

You're already getting resistance.

Speaker 3: is a bit specially part of that which is being put on hold much larger than anticipated. Is there anyone single or a couple of large physics which is kind of stop contributing the amount that we had expected? Any key on that color would be really nice.

Part of that which is being put on hold much longer than anticipated is there anyone in the last couple of months.

Ingo stop contributing the amount that we had expected and you can come back would be really helpful.

Yeah.

Speaker 4: So there is no one project or one specific client that is aware this is coming from. I think as we look at each quarter, we look at the combination of

So there.

There's no one project or one specific.

That is where this is coming from I think as we as we look at each quarter.

Salil Parekh: So, on the first part, we don't have a view on financial year 24 in terms of volume and so on. What we are sharing today is what we see, what we've seen for example in Q2 and what we observe from that, keeping in mind some of the seasonality of this coming quarter and the end of our financial year. On the pipeline or deal activity, as the London was sharing, we see a good pipeline.

We look at the combination of.

Speaker 4: the two streams on discretionary work and on digital transformation and other programs.

The two schemes on discretionary work and on digital transformation and other programs.

Speaker 4: how that's slowing down where it's slowing down what the volume implications are. And then we look at how the large and mega deals are coming into the revenue street.

How that slowing down there is slowing down what was the volume implications out.

And then we look at them.

Large and Mega deals are coming into the revenue stream.

Speaker 4: And that's what's leading us as we look out, when we see changes in the discretionary work, or we see some slowing down of decision making for closing these or slowing down in the start or ramp up, those are the factors that come into play as we look at the revenue outlook. And then as we come into this time of the year, especially,

And that's what's leading us as we look out.

When we see changes in the discretionary work.

Salil Parekh: Of course, the deals we have closed have come out of the pipeline, but it's still a good pipeline for us. There's a lot of interest from clients in cost and efficiency and automation, which is where many of these large and mega deals have come in. There's a good interest in consolidation, which is where some of those deals have come in. And we continue to gain market share in that, so we feel good about it. And there is that continuing interest in that type of work.

We see some slowing down of decision, making for closing deals are slowing down and the start of a ramp up and those are the factors that come into play as we look at the revenue outlook and then as we come into this this time of the year, especially.

<unk>.

Speaker 4: We look at the sea's nullity in Q3 and Q4 and how the thinking is in the client-bying environment. That's really the combination of things that we do. There's not any one activity which has led to that change for us.

We look at.

The seasonality in Q3 and Q4.

And how the thinking is in the client buying environment.

That's really the combination of things that we do theres not any one activity, which has led to that change for us.

Salil Parekh: Sure, the second question was the underlying assumption on the guidance if I understand right is that the revenue accretion from these large deals will be very minuscule this year and you have events on the discretionary side. The bigger accretion should really happen maybe next year. So this year is very minuscule, that's a very fair assumption. The definition of minuscule can be quite different, but yes, I mean it's more largely in FY25, absolutely. So I meant on a quarterly run rate basis, would it be minuscule of that coming into the revenue versus what you originally thought, that was the context.

Speaker 3: of it. Any specific pockets of weakness which you have seen deteriorated a much sharper rate than anticipated, it should be maybe vertical by or maybe a specific domain like it, cloud or the option for any other domain, or is it across the board.

Got it any specific pockets of weakness that you have seem to be doing it at a much sharper than.

I'm disappointed.

Maybe vertical wise or maybe if there's a big demand.

It was an option for them.

But I mean is it across the board.

So the the way we see in terms of industries.

Speaker 4: So the way we see in terms of industries, we have a similar sort of view from last quarter, the ones that we'll engine outline within financial services, mortgages, asset management.

We have a similar sort of.

View from last quarter.

The ones that the London outline within financial services are mortgages.

<unk> asset management.

Speaker 4: if you look at high-tech, telco, some parts of retail. So those are the ones we've not seen any sort of dramatic changes in that, but those are the ones that we're very serious in fact.

If you look at Hy Tech telco some some parts of retail so those are the ones we've not seen.

Nathan Padmanaban: And lastly, in terms of events on discretionary which verticals really stand out in terms of various in the maximum pressure, that's the last question, thank you. Yeah, I think it's we mentioned the three verticals. I think you can see it both sequentially, you can see it year on year, you can see it, the peer group, it is financial services, it's mortgage, it's asset management, it's faster retail, it's communication. And I don't think we are any different from any of our peers, I think everybody is calling out these three verticals and being soft. So fair enough, thank you so much for all the way back. Thank you.

Any sort of dramatic changes in that but those are the ones that where we see the impact.

Got it.

Speaker 3: Thank you so much for the questions and we will see you again.

Sure. Thank you so much for taking my questions.

Okay.

Yeah.

Thank you.

Speaker 2: The next question is from the line of Ashwin Meta from Ambit Capital Private Limited. Please go ahead.

The next question is from the line of Ashwin Mehta from Ambit capital Private limited. Please go ahead.

Speaker 10: Yeah, thanks for the opportunity. And it is just one question in terms of further third party, bought out items that seems to have added almost 75 watt million this quarter. So do you see this item sustaining or it kind of falls off? And is this one of the reasons for your weak items?

Yes, thanks for the biased.

And then just one question in terms of other third party bought out items.

That seems to have added almost 75 or to maintain this quarter. So do see this item sustaining or it kind of falls off and is this a one of the reasons, Saudi ought to beat guidance.

Vibhor Singhal: The next question is from the line of Webore single from Novama Equities, please go ahead. Yeah, hi, thanks for taking my question. Still a lot, just two questions from my side.

Speaker 6: Yes, and like I said, this is sometimes integral to our strategy as well, because we are doing large scale transformations and sometimes they have elements of licenses or software hardware inside. And therefore, I'm now guidance taken to account both volumes and any impact of, you know, any of that kind of the portfolio and non, you know, headcount portfolio as well.

Yeah. So like I said this is sometimes integral to our strategy as well because we're doing large scale transformations and sometimes they have elements of our licenses are software hardware on site and.

Unknown Attendee: We started the year with the guidance of 4 to 7 questions, 4 if I can be 4. And we basically counted that for guidance, second time this time around. So just, I mean, in the last call, we had mentioned that maybe in the first guidance, there was an assumption that which is not layout and we had a pair with a comparator from those in the last time. So just want to understand that, I mean, we have been getting good views all along, especially in this sort of, and as you mentioned, that's more than some of the views at any time.

And therefore, our I mean, our guidance takes into account both volume than any impact of any of that kind of.

The portfolio in the non U.

Head count portfolio as well.

Speaker 10: Okay, okay, and in terms of age hike next quarter what is the impact on margins that you see or the Quantum of age hike that you're giving out?

Okay, Okay and in terms of wage hikes next quarter, what is the impact on margins that you'll see at the quantum of wage hikes that you are giving up.

Speaker 10: So we just rolled it out. We cannot say what's going to be the impact, but it's like we said it's effective first of November . OK, fair enough in all the way.

So we have rolled it out we cannot.

Unknown Attendee: So what has changed from the time that we gave the first guidance to this time in terms of the projects that we have, that we are already wearing the accent. If I be specifically part of that, which is being put on hold much larger than that anticipated, is there anyone single or a couple of large physics which is kind of stopped contributing the amount that we had accepted? Anything from that color would be really helpful.

I'd say, what we're going to be the impact, but like you said, it's effective first of November .

Okay fair enough.

Thank you.

The next question is from the line of Carter Vaccinia from Morgan Stanley . Please go ahead.

Speaker 11: Hi, thanks for taking my question. First one is that is your guidance factor in the current environment remaining similar in the next two quarters or it kind of further deteriorates from here because it's kind of implying a decline sequentially with the next two quarters. So just trying to understand what's the underlying assumption on the current?

Hi, Thanks for taking my question first one is that.

Your guidance factor in E. Coddington warming remaining similar in the next two quarters are.

Unknown Attendee: So there is no one project or one specific client that is aware this is coming from. I look at the combination of the two streams on discretionary work and on digital transformation and other programs, how that's slowing down where it's slowing down what the volume implications are. And then we look at how the large and mega deals are coming into the revenue stream. And that's what's leading us as we look out, when we see changes in the discretionary work, or we see some slowing down of decision-making for closing deals or slowing down in the start or ramp up, those are the factors that come into play as we look at the revenue outlook.

Kind of a.

Further deteriorates from here, because it's kind of implying a decline.

A question over the next two quarters with just trying to understand what's the underlying assumption on the 101 rig.

Speaker 4: I think the way we're looking at the guidance is in a typically Q3 and Q4 are seasonally weaker quarters.

I think the way we are looking at the guidance is.

Typically Q3, and Q4 are seasonally weaker quarters. So that that is something we've factored in in addition to what I was sharing earlier.

Speaker 4: So that is something we factored in in addition.

Speaker 4: to what I was sharing earlier, the slowing of discretionary transformation and with the large and mega-deals, seeing how the ramp up will look like as it converts.

The slowing of discretionary transformation and.

With the large and Mega deals.

Seeing how the ramp up will look like as it converts.

Speaker 4: but we've looked at more what we see seasonally, weaker Q3 and Q4 from our historical perspective.

But we've looked at more of what we see seasonally.

<unk>.

Q3, and Q4 from a.

Our historical perspective.

Speaker 11: Secondly, you have closed a couple of mega deals in the last few months. Now, when you look at your large dint pipeline, how do you characterize this? Do you still have mega deals that you are pursuing which can close in the coming months?

Alright.

When you close a couple of me that is at the last few months now when you look at your large deal pipeline.

Unknown Attendee: And then as we come into this time of the year, especially,[inaudible] Sumeet Jain, Sumeet Jain Sumeet Jain, Sumeet[inaudible] Sumeet Jain, Sumeet Jain, Sumeet Jain, Sumeet Jain Sumeet Jain, Sumeet Jain, Sumeet Jain, Sumeet Jain[inaudible] For taking my question, the first one is that is your guidance factor in the current environment remaining similar in the next two quarters or it kind of you know further deteriorates from here because it's kind of implying a decline sequentially with the next two quarters so just trying to understand what's the underlying assumption on the current, and more. I think the way we're looking at the guidance is in a typically Q3 and Q4 are seasonally weaker quarters, so that is something we factored in in addition to what I was sharing earlier, the slowing of discretionary transformation and with the large and mega deals, seeing how the ramp up will look like as it converts.

Would you characterize this do you still have.

Mega deals that youre pursuing which can close in the coming months.

Speaker 4: So there we've closed for all of these mega deals that I referenced earlier. We have a good pipeline. We are not detailing beyond that the type of deals.

So there we were.

Closed.

All of these mega deals that I referenced earlier.

Have a good pipeline we are not.

Detailing beyond that the type of deals.

Speaker 4: what we see is the deals that you close have come off, but there's a huge appetite with clients for cost and efficiency, and those tend to be larger within even a large deals pipeline. So yes, we will see some of those larger deals going ahead.

What we see is the deals that we've closed have come up but there's a huge appetite with clients for cost and efficiency and those tend to be larger within even our large deal pipeline. So yes, we will see some of those larger deals.

Going ahead.

Speaker 11: But last question to the Lanjian that the project Maximum that you talked about, is it fair to say that the full benefit would accrue to the company in fiscal 25 and it just started to kind of trickle into the numbers in recent quarter, but the full benefit will accrue in FI25.

Got it last question to the language that be predict Maximus that you talked about.

Is it fair to say that the flu benefit.

True to the company in fiscal 'twenty, five and it just started to kind of trickle into the numbers in recent quarter, but the full benefit will accrue in FY 'twenty five.

Speaker 6: So like I said, there is a very complex program. There are a number of tracks. So there are new ideas as we see each quarter. So you will see impact over, like I said maybe 18 months of this program and throughout as we tracking it as the quarter. And like I said, and sometimes you will see a faster, benefit like utilization, for instance, there's clearly something which is here and now. So you'll see some of that impact even faster. But some of us take longer to.

Well so like I said, there is a very complex program there are a number of track.

So we had no idea that we are.

See you know each quarter. So you will see a impact or like I said, maybe 18 months of their programming.

As we are tracking it every quarter and I guess that and sometimes you will see a faster.

Benefit like utilization center, clearly something which is here right now so you'll see some of that impact even faster, but some of us take longer to materialize.

Thank you.

Speaker 12: Thank you.

Thank you.

Speaker 2: The next question is from the Lionel's Keith from BMO. Please go ahead.

The next question is from the line of Keith <unk> from BMO. Please go ahead.

Thank you very much this is Keith Bachman from bank of Montreal.

Speaker 2: The first question I have is how you interact with your voices a little bit of muffled to kinetic

The first question.

Illinois is a little bit the moorefield kinetic hershey to use the handset.

Hence if not closer to you.

Yeah, absolutely. So you've mentioned a few times that discretionary spend or discretionary projects are a reason for revenue guidance and reporting.

Speaker 5: Yes, absolutely. So you've mentioned a few times that the discretionary spend or discretionary project.

Speaker 5: are a reason for revenue guidance and reporting. Can you tell us what percent of your revenues would you characterize as being sourced from discretionary areas? Is it 30% of total revenues, 40% of total revenues? Any rough estimate you could give us on how much of your revenues are generated from discretionary sources?

Can you.

Tell us what percent of your revenues or would you characterize as that.

Being sourced from discretionary areas is up 30% of total revenues, 40% of total revenues any.

Rough estimate you could give us on how much of your revenues are generated from discretionary sources.

Yes, so we don't really give that number out.

Speaker 6: Yeah, so we don't really give that number out, you know, in public domain. So I think that's where we are. Of course, generally we have fixed price projects. We are more committed to the TNM side of the house. We'll have a bit of variability into it, but we don't give the discretionary.

No.

And in public domain. So that's.

Thats the area of cost and generally we have fixed price projects. We are more committed PNM side of the house will have a bit of variability into it but we don't give the discrete city ready.

Okay.

Speaker 5: The 7.7, the second question is the 7.7 large deal T.C.V. Within that number, do the clients have the ability to cancel those contracts? And what is, if it, yes, what's the cancellation rate been over the last few quarters versus historic norms?

Seven seven in the second question is it seven seven large deal T V.

Within that number to the clients have the ability to cancel those contracts and what is if it yes, what's the cancellation.

Right Ben over the last few quarters versus historic norms.

Speaker 6: See these are largely sign contracts so they take time to ramp up so we have not seen any real cancellations really you know they may take longer to ramp up than you know originally in Sazar but there are no cancellations there.

The C V that long lead time contracts, they take time to ramp up so we have not seen any of your own.

Cancellations really you know they may take longer to ramp up than you know originally in for that but they have no cancellations.

Speaker 5: Okay, okay, sure enough, perfect. And then my last question is, as you think about, it imposes in TCS and Accenture and other...

Okay. Okay fair enough perfect and then my last question is.

If you think of Infosys, Tcs and Accenture and other.

Speaker 5: IT Services Organization are experiencing challenges with growth. So it took it to the industry-wide issue. Again.

Unknown Attendee: But we've looked at more of what we see seasonally a weaker Q3 and Q4 from our historical perspective. Secondly, you've closed a couple of mega deals in the last few months. Now, when you look at your large deemed pipeline, how do you characterize this? You still have mega deals at your pursuing, which can close in the coming months? So there we've closed four of these mega deals that I referenced earlier. We have a good pipeline.

It services organization are experiencing challenges with growth. So it's an industry wide issue.

Against that backdrop.

Speaker 5: when you think about pricing that your clients are willing to accept. Have you seen any changes in light for light pricing?

When you think about.

Icing that your clients are willing to accept have you seen.

Any changes in like for like pricing.

Speaker 5: when you're negotiating with clients for large deals or otherwise, has that changed though? Or is the life for life pricing remained fairly steady even in this week macro backdrop?

When you are negotiating with clients for large deals or otherwise has that changed at all or is the like for like pricing remained fairly steady even in this weak macro backdrop.

Speaker 6: Yeah, I think you're right. I think largely it's been stable. Of course, in some quarters, you can see, you know, few clients are coming back and asking for discounts. But I think overall, even if I look back, it has been, you know, in terms of the annual renewal, et cetera. Yeah, I think pricing has been most stable, you know, over the last year, two years. As a general trend, I would think in industry. Of course, deal to deal, they are, it gets competed hard. But overall, I don't see, you know, deteriorating pricing environment. Yeah.

Yes, I think you're right I think largely been stable across in some quarters. You can see you know a few clients are coming back and asking for discounts.

Unknown Attendee: We are not detailing beyond that the type of deals. What we see is the deals that you've closed have come off, but there's a huge appetite with clients for cost and efficiency, and those tend to be larger within even a large deals pipeline. So yes, we will see some of those larger deals going ahead there.

But I think overall, even if I look back it has been you know in terms of the annual renewals et cetera.

I think pricing has been more stable over.

Over the last year or two years as a general trend I would think in the industry of course deal to deal. It gets competed hard but overall I don't see a deteriorating pricing environment.

Okay. That's it for me many thanks cheers.

Salil Parekh: But last question to relaunchen that the project maximum that you talked about, is it fair to say that the full benefit would accrue to the company in fiscal 25 and it just started to kind of trickle into the numbers in recent quarter, but the full benefit will accrue in FI-25? So like I said, there is a very complex program. There are number of tracks. So there are no ideas as we see each quarter.

Yeah.

Thank you.

Speaker 13: Thank.

The next question is from the line of Yogesh Aggarwal from HSBC. Please go ahead.

Speaker 2: The next question is from the line of Yogesh Agarvand from HSBC.

Yeah, Hi, guys. Just one question on on large deals.

Speaker 14: Yeah, hi guys. This one question on last week, which have been extraordinary, almost two, three times of your past run rate.

These have been extraordinary almost three times of your box M D.

I was curious what is this year of large deals from existing customers.

Speaker 14: What is the share of large leads from existing customers versus new? Can you just give some context there?

Salil Parekh: So you will see impact over, like I said, maybe 18 months of this program and throughout as we tracking it every quarter. And like I said, sometimes you will see a faster benefit like utilization, for instance, there's clearly something which is here and now. So you will see some of that impact even faster, but some of us take longer to materialize.

Unknown Attendee: Thank you.

No.

Can you just give some context here.

So there again.

Speaker 4: We share the net new amount, which is 48%. But we don't share what is from new client, this is not new client.

We shared the net new amount, which is 48%, but we don't share what is from new clients versus not new client.

Speaker 14: Okay, so, so the reason I'm asking is it's very intriguing that clients are not spending on small discretionary projects but avoiding such mega contract. So, is it possible since this year everyone is cautious, they are just clubbing a lot of smaller projects and avoiding in larger deeds, which means next year we will effectively have two years of cash up on discretionary.

Okay.

The reason I'm asking is that it's very intriguing that language that notwithstanding a smaller piece or anything like that but everyone being said mega contracts.

Keith Bachman: The next question is from the line of Keith from BMO. Please go ahead. Hi, thank you very much. This is Keith Pakman from Bank of Montreal. The first question I have is your voice is a little bit muffled. Can I request you to use the handset muffler to you? Yes, absolutely. So you've mentioned a few times that discretionary spend or discretionary projects are a reason for revenue guidance and reporting. Can you tell us what percent of your revenues would you characterize as being sourced from discretionary areas?

Is it possible.

Everyone is of course, yes, yeah, there's been a lot of smaller projects and avoiding in larger deals.

It means next year, even if activity has two a year ago. So that's up on some of these things.

Speaker 4: You know, some of these deals have been publicly announced. These large programs are a combination of

No.

Some of these deals are have been publicly announced.

These large programs.

On a combination of.

Speaker 4: Many times, they're cost or efficiency automation programs. And sometimes, they're programs which take all of that, let's say, the saving that decline.

Many times, our cost or efficiency automation programs and sometimes their programs, which take all of that let's say the saving that declined.

Keith Bachman: 30% of total revenues, 40% of total revenues, any rough estimate you could give us on how much of your revenues are generated from discretionary sources. Yes, so we don't really give that number out, you know, in public domain, so I think that's where we are. Of course, generally, we have fixed price projects, we are more committed to the TNM side of the house, we'll have a bit of variability into it, but we don't give the discretionary really.

Speaker 4: is likely to accrue and from that fund some transformation programs. So we don't appear from our interactions to be a consolidation of smaller discretionary work. These are large independent programs. And that's where we feel.

It's likely to accrue.

From that.

And some transformation programs. So these don't appear trauma.

The actions to be a consolidation of smaller.

Discretionary work. These are large independent program and that's why we see.

Speaker 4: First, that in that space, which is today really more active, this cost efficiency space, we seem to be gaining market share, and that those, the way they're being set up and what we see, give us a good foundation for our future.

But then in that space, which is today really more active this cost efficiencies piece we.

We seem to be gaining market share.

Keith Bachman: Okay, the 7.7, the second question is the 7.7 large DLTCV within that number, do the clients have the ability to cancel those contracts and what is, if it yes, what's the cancellation rate been over the last few quarters versus historic norms. See, these are largely sign contracts, so they take time to ramp up, so we have not seen any real cancellations, really, you know, let me take longer to ramp up than, you know, originally, but they have no cancellations in it.

And that those.

But the way they are being set up and what we see give us a good foundation for our future.

Thank you so much.

Thank you.

The next question is from the line of Kinder from Spam's. Please correct.

Speaker 2: The next question is on the line of Rebecca Da from SBI, Michelle Sun, please go.

Speaker 15: Hi, thanks a lot for the opportunity. So, you, in fact, this is one of the comments that you just made. I just wanted to get a sense of the market share games that you've been talking about currently with other design dealments. Could you give us a sense of how these market share games have been versus the past? Are you seeing quite a lot of acceleration out there and how good you can get out of it?

Hi, Thanks, a lot for the Ultrashape.

In fact based on your comments that you just made I just wanted to get a sense. So the market share gains that you had been talking about.

Currently the bulk of this large deal wins could you give us a sense of how these market share gains have been which is G fast or you've seen like every dose escalation all day on how to think about it.

Keith Bachman: Okay, okay, sure enough, perfect. And then my last question is, as you take up, Infosys is in TCS and Accenture and other IT services organizations. They're experiencing challenges with growth, so it's an industry-wide issue. Against that backdrop, when you think about pricing that your clients are willing to accept, have you seen any changes in like for like pricing when you're negotiating with clients for large deals or otherwise. Has that changed, though, or is the life for like pricing remained fairly steady, even in this week macro backdrop.

Speaker 4: So there, you know, we are seeing more discussions on cost or consolidation and when you, for example,

So that would be.

We're seeing more discussions on cost of consolidation and when you put an example.

Speaker 4: We have a win as we've had over the last few quarters in consolidation of partners with the client. There's a significant change that

Sure.

When as we've had over the last few quarters and consolidation.

<unk> partners with a client.

There is a significant.

Change.

That changes the math.

Speaker 4: the market dynamic within that client. And then we put all of these things together between some of the large programs you want to cost efficiency and then on consolidation.

Dynamic within within that client and then we put all of these things together between some of the large.

Programs, you're well on cost efficiency and then on consolidation it looks like we seem to be gaining traction we have a very good capability set on automation and clients.

Speaker 4: It looks like we seem to be gaining traction. We have a very good capability set on automation and clients are appreciating that. So that seems to be the reason why we believe, or we think that it looks like we're gaining market share and those are.

Keith Bachman: Yeah, I think you're right. I think largely it's been stable across in some quarters. You can see, you know, few clients are coming back and asking for discounts, but I think overall, even if I look back, it has been, you know, in terms of the annual renewal, etc. I think pricing has been most stable, you know, over the last year, two years as a general trend, I would think in the industry. Of course, deal to deal, they are, it gets completed hard, but overall, I don't see, you know, deteriorating pricing environment.

<unk> that does that that seems to be the reason why we believe or we think that it looks like we're gaining market share in those areas.

Speaker 15: But is there a way to think about some of the one? Is there a quantified condition that are you seeing that time budgets are actually not increasing while you potentially are, or you potentially are getting more deals versus what your peers are?

But is there a way to think about promotion.

Is there anything to quantify foundations that are you seeing that kind, but just had actually not increasing while you potentially.

Are you potentially are winning more deals versus what you'll see us catch up.

Keith Bachman: Okay, that's it for me. Many thanks. Cheers. Thank you.

Yeah.

Yogesh Aggarwal: The next question is from the line of Yogesh Agarwal from HSBC. Please go ahead. Yeah, hi, guys. Just one question on on large deals, which have been extraordinary, almost two, three times of your past run rate. Was curious. What is the share of large deals from existing customers versus new? Can you just give some context there? So there again, we share the net new amount, which is 48%, but we don't share what is from new client versus not new client.

Difficult put us to say on a on a sort of a macro level.

Speaker 4: Difficult for us to say on a sort of macro level But I think generally speaking the clan budgets at least we don't see those increasing at that distance

But I think generally speaking the client budgets at least we don't see those increasing at this stage.

Speaker 15: got that. Basically, I also wanted to get a sense of the neural some of these large deals that you have won. And any context of how it has been historically. So while there have been, it's probably logical to expect that these are long-term near deals. But the physical given a sense of how ACV growth has been versus the 30-CV growth.

But deck.

Secondly, I also wanted to get a sense of the new at all some of these large deals that you won any.

And any context.

How it has been historically so while there has been a let's see probably logical to expect that would be that long term guidance, but if you could give us a sense of how you see the growth has been let's say mid <unk> citigroup.

Yeah.

So there.

Speaker 4: So there, some of them with the disclosures, we have done have that information, but we don't generally speaking share that information for the aggregate and certainly not vis-à-vis what was going on the path. But for the specific ones where we have the disclosures, we've shared that information.

Some of them.

With the disclosures we've done.

Yogesh Aggarwal: Okay, so the reason I'm asking is, it's very intriguing that clients are not spending on small discretionary projects, but avoiding such mega contract. So is it possible since this year, everyone is cautious, they are just clubbing a lot of smaller projects and avoiding in larger deals, which means next year, we will effectively have two years of cash upon discretionary spend. Um. So, you know, some of these deals have been publicly announced.

Have that information.

But we don't.

Generally speaking share that information for the aggregate.

Certainly not vis vis what was going on the bus but for the specific.

One will be that the disclosures we have shared that information.

Yeah.

Speaker 15: God that just lastly from my side, I just wanted to also get a sense on this third party item spot out with almost included $25 million However, we called out that one time very new Bampa got we got was 30 different points Which is literally lesser than what we see here is that different items on how to think about that

Got it just lastly from my side.

I just wanted to get a sense on this touched on key items cost us almost <unk> $75 million.

We called out that one time they renewed.

Yogesh Aggarwal: These large programs are a combination of many times a cost or efficiency automation program and sometimes a programs which take all of that, let's say the saving that the client is likely to accrue and from that fund some transformation programs. So, we don't appear from our interactions to be a consolidation of smaller discretionary work. These are large independent programs and that's when we see first that in that space which is today really more active this cost efficiency space. We seem to be gaining market share and that those with the way they're being set up and what we see give us a good foundation for our future. Thank you so much. Thank you.

But I think that was 30 basis points.

The 2 million better than what we see is that different.

Different items and how to think about that.

Speaker 6: Absolutely, they are different items. And in the March and War, I also talked about the one time having a positive impact and the, you know, the license sales, et cetera, having a third party cost, having a downward impact on March and the other, we are different.

Absolutely they are different items.

And then the margin walk I also talked about the one time, having a positive impact can be.

The the.

License sales.

Or a third party costs, having a downward impact on margins.

Yeah.

Got it thanks a lot.

Thank you.

Speaker 2: The next question is from the line of Abhishek Kumar from J.M. Financial. Please go ahead.

The next question is from the line of Alicia Kumar from JM Financial. Please go ahead.

Yeah, Hi, good evening. Thanks for taking my question I have is also planning to deconstruct. This quarter's growth. It seems to me there is a volume decline this link by the head count declining and small ingredient.

Speaker 14: I will also plan to reconstruct this photo's growth. It seems to me there is a volume decline just flowing by the head, down the climb and small increase in utilization. And so is it the realization which has helped us or

Languishing.

So.

Is it.

That realization, which has helped us.

Speaker 14: or some other one time which you mentioned and it has been asked in the previous question also. Or is it that some of the smaller teams, like less than $50 million, if you don't disclose?

Some of the one time issues that you mentioned.

Vekeda: The next question is on the line of Vekeda from SBI. Please go ahead. Hi, thanks a lot for the opportunity. Shalini, in fact, there's some of the comments that you've just made. I just wanted to get a sense of the market share gains that you've been talking about currently with all of these large dealments. Could you give the sense of how these market share gains have been versus the past? Are you seeing quite a bit of acceleration out there and how to think about it?

Some of the previous questions also.

What is it that.

No.

Some of the smaller deals like a $50 million less than $60 million, which we don't disclose.

Speaker 14: the uptake in those beams or kind of in view of those beams has kind of dried up significantly significantly reaching basically resulting in mega-due needed to kind of sustain the volume

The little uptick in those deals.

Kind of inflow of those deals.

Yes.

Right.

If you can believe it team.

Basically is there anything.

And maybe I didn't needed to kind of.

Staying in the market.

Yeah.

Speaker 6: So as I, in my opening remarks, I said that we are continuing softness in the underlying volume and the revenue for the quarter was supported by a stronger growth in the balance portfolio and improved realization from one time.

Well now.

In my opening remarks, I said, we are continuously softness in the underlying volumes and the revenue for the quarter was supported by stronger growth in the balanced portfolio and improved realization from one timers.

Vekeda: So there, we are seeing more discussions on cost or consolidation. And when you, for example, have a win as we've had over the last few quarters in consolidation of partners with the client, there's a significant change that changes the market dynamic within within that client. And then we put all of these things together between some of the large programs you want to cost efficiency and then on consolidation. It looks like we seem to be gaining traction.

Okay.

Speaker 15: So my question also was, you know, while I know we don't give the numbers out, but the contribution of the 11 $15 million dollars we deal in our...

So.

My question also was.

No we don't.

The numbers out, but the contribution of <unk> three.

$3 million.

Bill.

Speaker 15: revenue contribution or pipeline. How has that changed? The reason I am asking is it seems that without the mega deal or large deal ramping up.

Revenue contribution or pipeline.

Has that changed.

But even I am asking is it seems that without the mega deal are lagging ramping up.

Speaker 15: there is a sustained pressure on margins and these deals could be, it could be difficult to buy when really these deals will ramp up. So in the absence of that.

That is a sustained pressure on margins in these deals could be.

Vekeda: We have a very good capability set on automation and clients are appreciating that. So that seems to be the reason why we believe or we think that it looks like we're gaining market share in those areas. But is there a way to think about some of one? Is there a quantified sense that are you seeing that client budgets are actually not increasing? While you potentially are getting more deals versus what your peers are.

The time when the Leds deals will ramp up so in the absence of that the contribution of smaller deals.

Speaker 15: the contribution of smaller deals has that really kind of thing.

Really kind of teens and the proportion of Ah.

Speaker 6: as a proportion of revenue or the last few quarters. So we don't give out this information.

Revenue over the last few quarters.

So we don't give out this information.

Okay. Thank you.

Thank you.

The next question is from the line of Affordable Prasad from <unk> Securities. Please go ahead.

Speaker 16: Thanks for taking my question. So I have a question on the head count, which how should we really think about that progressing over the next few quarters? It's been down 5% over the past few quarters with utilizing.

Thanks for taking my question Oh, I have a question on the headcount.

Vekeda: Difficult for us to say on a macro level, but I think generally speaking, the client budgets, at least we don't see those increasing at that stage. Got that. Secondly, I also wanted to get a sense of the nearer of some of these large deals at your one. And in the context of how it has been historically. So while there have been it's probably logical to expect that these are long-term near deals.

How should we really think about that progressing over the next few quarters, it's been down 5% over the past few quarters.

Utilization that have been flagged as closely.

That isn't it.

Speaker 6: So you have to generate of course volume, aggression, new hiring and utilization. I mean, the broad messages that, you know, even with the utilization increased today to 81.8, we still have a room, you know, to improve the utilization for the, so that should give you a sense of things to come. And of course, we can do to monitor overall volumes, et cetera.

That's all.

Triangulate across volume attrition new hiring.

And ER utilization I mean, the broad message is that you know even with the utilization increased to 81, eight we still have headroom.

Vekeda: But if you could give us a sense of how ACV growth has been versus the 30-CV growth. So, there some of them with the disclosures we have done have that information but we don't generally speaking share that information for the aggregate and certainly not vis-à-vis what was going on the path. But for the specific ones where we have the disclosures we've shared that information. Got that. Just lastly from my side, I just wanted to also get a sense on this third party item spot out which almost includes the $25 million.

You know.

To improve the <unk>.

Vision further so that should give you a sense of things to come and of course, we can do to monitor overall volume that kicks off.

Speaker 6: So there is enough headroom and this is helping us in margins like I said is a beginning right. This is that margin lever which we can use.

There is enough headroom and actually helping us in margin like I said at the beginning right.

That margin give up which you can use.

Yeah.

Right.

Speaker 17: is a larger and slightly any vertical call out in the one timer in revenue that should have to work.

And secondly, any vertical core loan and the one time or in revenue.

That's up to them yet.

Okay.

Yeah.

Vekeda: However, we called out that one time where we knew Bampa that we got was 30 business points which is way too many lesser than what we see here. Is that different items on how to think about that? Absolutely, they are different items and in the margin walk I also talked about the one time having a positive impact and the license sales etc, having a third party cost having a downward impact on margin. Yes, we are different. Thanks a lot. Thank you.

With that do you have any other question.

Yeah.

Uh huh.

The line is from your tone I guess do you have any other follow up questions.

Okay.

So that seems to be no response from that line participants.

Yeah.

Speaker 2: Ladies and gentlemen, that would be our last question for today. I now hand the conference back to the management for the closing remarks. Thank you and O.

Ladies and gentlemen that would be our last question for today I now hand, the conference back to the management for their closing remarks, Thank you and over to you.

Abhishek Kumar: The next question is from the line of Abhishek Kumar from GM Financial. Please go ahead. Yeah, I agree with you. Thanks for being a question. I will also plan to deconstruct this photo growth. It seems to me there is a volume decline just showing by the head down the line and small increase in utilization. Is it the realization which has helped us or some of the one time which you mentioned and has been asked in the previous question also?

Speaker 4: So thanks everyone, this is Salil. Thank you for all your questions and the interactions. I just want to close on a few points first. We've had an incredible quarter on large and mega deals really with 7.7 billion the largest we've seen in the company for a quarter and this gives us a good foundation for the future.

So thanks, everyone. This is Sally.

If all of your questions and the interactions I just wanted to close on a few points first.

We've had an incredible quarter and large and mega deals really.

With $7 7 billion the largest we've seen.

In the company for the quarter and this gives us a good foundation for the future.

Speaker 4: The core itself was great in terms of sequential growth and operating margin.

The quarter itself is great.

Terms of sequential growth and operating margin.

Abhishek Kumar: Or is it that some of the smaller deals like less than $50 million if you don't disclose the uptake in those deals or in few of those deals has kind of dried up significantly which is basically resulting in mega deals needed to kind of sustain the volume growth.

Speaker 4: We've got a comprehensive program on margin expansion, which is in place with several large components and tracks running across the company. And we continue to invest in generative AI where we're making great connects with clients, especially leveraging topaz. So those really are the main points from us. And thanks, thanks very much again for joining in for the call. Thank you.

We've got a.

Comprehensive program on margin expansion, which is in place.

With several large components and tracks are running across the company.

And we continue to invest in generative AI remaking draped connects with clients, especially leveraging topaz.

So those really are the main points from us and thanks, Thanks very much again for joining in for the comment.

Abhishek Kumar: So as my opening remarks I said that we are continuously softness in the underlying volume and the revenue for the quarter was supported by a stronger growth in the balance portfolio and improved realization from one time ago. Okay, so my question also was, you know, while I know we don't give the numbers out but the contribution of the less than $50 million deals in our revenue contribution or pipeline, how has that changed?

Thank you very much Mr. The management ladies.

Speaker 2: Ladies and gentlemen, on behalf of InfoSus, that concludes this conference. Thank you all for joining us and you may now.

Ladies and gentlemen on behalf of Infosys that concludes this conference. Thank you all for joining US and you may now disconnect your lines.

Thank you.

Abhishek Kumar: The reason I am asking is it seems that without the mega deal or large deal ramping up there is sustained pressure on margins and these deals could be difficult to time when really these deals will ramp up. So in the absence of that the contribution of smaller deals has that really kind of changed as a proportion of revenue over the last two quarters. So, we don't give out this information here, thank you very much. Thank you.

Apurva Prasad: The next question is from the line of Apurva Prasad from HTFC Securities, please go ahead. Thanks for taking my question, I have a question on the head count which how should we really think about that progressing over the next few quarters? It's been down 5% over the past few quarters with utilizations that have been flat, saw, stream, expect that it will. Yes, so you have to try and get across volume, aggression, new hiring and utilization, I mean the broad messages that you know even with the utilization increase today to 81.8 we still have a room you know to improve the utilization for the so that should you know give you a sense of things to come and of course we can do to monitor overall volume etc.

Apurva Prasad: So there is enough head room and this is helping us in margins like I said is a beginning right, this is a margin giver which we can use. Right, and slightly any vertical call out in the one timer in revenue that should have it to earlier. Apurva, your line is muted I guess. Do you have any other follow-up questions?

Unknown Attendee: So there seems to be no response from the current participants.

Salil Parekh: Ladies and gentlemen that would be our last question for today, I now have the conference back to the management for the closing remarks, thank you and over to you. So thanks everyone, this is Salil, thank you for all your questions and the interactions.

Salil Parekh: I just want to close on a few points first. We add an incredible quarter on large and mega deals really with 7.7 billion the largest we've seen in the company for a quarter and this gives us a good foundation for the future. The quarter itself was great in terms of sequential growth and operating margin. We've got a comprehensive program on margin expansion which is in place with several large components and tracks running across the company and we continue to invest in generative AI where we're making great connects with clients especially leveraging topaz.

Unknown Attendee: So those really are the main points from us and thanks very much again for joining in for the call. Thank you very much, members of the conference.

Unknown Attendee: Management, Ladies and Gentlemen, on behalf of Infosys, that concludes this conference. Thank you all for joining us and we may now order.