Q3 2024 Infosys Ltd Earnings Call - Press Conference

January 11, 2024

This included one Mega deal.

We are seeing strong traction for generative AI programs, leveraging our topaz capability, we have integrated our generator AI components into a service line portfolio, creating impact for our clients.

We have 100000 employees train engender the AI areas, we have developed a range of use cases and benefit scenarios across different industries for our clients.

Our margin improvement program continues to gain traction.

Based on the performance in the first three quarters and outlook for Q4, we're tightening our revenue growth guidance for FY 'twenty four to one 5% to 2% growth in constant currency.

Our operating margin guidance for FY 'twenty four remains unchanged at 20% to 22%.

Speaker Change: As you probably know the London is leaving Infosys at the end of this financial year.

Speaker Change: I want to thank the London for the excellent work he has done and for the strong position. He has put infosys in.

Speaker Change: In addition, I also want to thank the London for his partnership and his friendship over the past several years.

Speaker Change: We wish him all the best in the future.

Speaker Change: With that let's open up for questions.

Thank you Phil and we will now open the floor for questions joining sell them is with Sydney, London, Broil, Chief Financial Office Infosys.

Speaker Change: The first question is from reducing from CNBC deviating.

Devina: Hi studies outside of London.

Speaker Change: Always we want to understand why you know yet again now for the third time during the year you revised the guidance what is the visibility you have now.

Speaker Change: For the remaining parts of the year why the tightening I mean short, it's going to be higher than 1%, perhaps lower than 2.5% of the upper and secondly, what are you seeing when it comes to client budgets now our clients in the U S open to spending more.

The areas of weaknesses and strength, whether it's geographies or sectors.

Speaker Change: And again the same question that head count continues to come down even in this quarter. It has even though your attrition rate is lower 12, 9% your hiring plans for the year, if you could outline and apart from the numbers. If you could clarify on the deal wins and that Mega one and a half billion dollar deal that Mou that you had signed with a global client in the eye.

Speaker Change: Confirmation space that you seem to have lost out on what was the reason for that are you continuing to see deal cancellations and why you wish your colleague all the very best and you always see that emphasizes produce talent for other companies you're proud of that but you know what is the impact on business because there's not a one off event, we've seen multiple exits over the course of the.

Speaker Change: Last 18 months or so.

Speaker Change: Okay. So let me let me start over several several questions in there.

Speaker Change: The first I think was on <unk>.

And so what we've done is really as we get closer to the end of the financial year, we've tightened the margin the sorry, the revenue growth guidance the margin guidance remains the same.

Speaker Change: So in effect really.

Speaker Change: The higher end has come a little bit lower on the lower end has gone up a little bit. So we see the outlook in S. N scribe similar.

But the guidance is tightened that that's how we're seeing it based on what we've seen in the first three quarters, where our growth has been 1.8%.

In constant currency terms over the previous year's three quarters, and that's really all we've done with the guidance.

Speaker Change: On the budgets I think that that was one of the questions on what we're seeing with the budgets.

At this stage, we have not seen any different.

Speaker Change: Behavior from clients typically as you know well Q3 is it.

Quarter with the large.

Speaker Change: Furloughs.

Speaker Change: Other end of year.

Speaker Change: Holidays and that we've seen continue.

Speaker Change: We've not seen either an increase or either a decrease or the same sort of a view digital programs, our fuel cost and efficiency automation is much more and generate a V. I has a lot of interest and traction even if it's small revenue number.

Speaker Change: Today.

Speaker Change: Then there was a question I think about the.

Speaker Change: The Mou.

Speaker Change: We have no additional comment we'd shared the comment in the statement. We've made I think a few some time ago in the quarter.

Terms of leadership.

<unk> fortunate to have a good good team and a very strong.

Set of leaders within the company.

And over the last several quarters and even in the past the people who've taken on many of the new positions are people who have.

Speaker Change: Been in the company have developed their skills that and we are delighted that the London spent five years in that role even obviously sure sure his view and we've got a fantastic outcome in those five years and really.

Lessons contributed immensely to that and all the best wishes as he looks ahead.

Speaker Change: Thank you.

Speaker Change: Let's start it on the head count question as well Anthony luncheon.

Project Maximus.

Speaker Change: And just before you go I would like to know from you.

Speaker Change: Or do you see the Angola project.

Speaker Change: How do you evaluate your tell me on what's next for you.

Speaker Change: After much yeah. So it's been a tremendous five years here and I think.

Speaker Change: You know what the company has transformed over the years have been truly remarkable right in terms of the client intimacy, what we see a hunger for large deal with a focus on people the entire focus on the shareholder that the capital allocations of truly.

Speaker Change: Outside the numbers with you all ask about has been this whole transformation happening inside and you know in the cellular and the board leadership as truly being wonderful.

Speaker Change: Five years, a long time 20 quarters.

Speaker Change: I'll take the question for it I think it's time to move and I do have big <unk>.

Speaker Change: Later on and as the press release says, but more importantly for me I may leave emphasis where infosys currently dissatisfied with me inside.

Thanks, Richard The next question is from the economic times Bina.

Bina: Hi, Celine thanks for the call.

Bina: Firstly in terms of your deal pipeline could you give us a sense how does the next two quarters look like because your deal has deep I paint. The order book has reduced that we've seen and in the previous quarter. It was $7 7 billion, but this has the PCB has sort of reduced could you give us a reason for that.

Bina: And on the senior level management churn that we've seen just adding to what Peter said.

Bina: What is the reason that you've not really.

Bina: Absorbed newer or.

Bina: <unk>, new way, Amit newer appointments and what is the reason that you were seeing a lot of these churn that's happening do you see this.

Speaker Change: As you know a one off event in one of the reasons and another thing is on the.

Speaker Change: But the parts that are doing around about.

Speaker Change: Interest is sending a communication to rival about and people Ching and unethical practices could you give us you know.

Speaker Change: Do you want that.

Okay. Thanks.

Speaker Change: Let me try and go through the questions I think first.

Speaker Change: On the wins and in fact this quarter's been I think very strong at $3 2 billion. If you look at the nine months is the highest ever value of deal wins that'd be that actually it's more than what we had in the year before where we add a very large deal and that is and so we feel extremely good.

Speaker Change: 70% of this is net new 71% that again is extremely strong because it helps to position us for more into the future. The deal win from last quarter was also exceptional but those are big numbers. I mean, three 3 billion is really well above <unk>.

Speaker Change: Average deal win and in any quarter. If you look back, let's say 810, 12 quarters and so on so we've been extremely strong with that what we see going at and these have deals which are related to.

Speaker Change: Cost efficiency automation consolidation new work on S&P cloud, so a lot of different areas, which is good.

Speaker Change: Across the portfolio.

Speaker Change:

Speaker Change: I think you had a question on our senior leadership team.

Speaker Change: Again my sense is you know we.

Speaker Change: Have an exceptionally strong team at different levels within the company. We've continued over the last several years and even well into the past always promote a lot of people internally with larger responsibilities. We will do that this year and in the years ahead.

And the type of work that we do people have exposure to some incredible opportunities both with clients with delivery with projects and the type of projects. We're working on are quite leading so we feel good about that in terms of some of the media reports you alluded to we have no real comment on.

Speaker Change: That.

Speaker Change: Thank you.

The next question is from are you spun baruah from business standard.

Speaker Change: Hi.

Speaker Change: I think the trend seems to continue that despite the large and mega deals.

Speaker Change: New growth has not been on par.

<unk> now up and running.

Thank you.

The next question is from Ndtv profit sharply.

A couple of questions first on the Dealmaking, we see that the large deal wins are still happening, but they're still not meaningfully converting revenue. So when do you think there is going to come back and other large deals ramping up as per expectations. A sofa also your margins have declined quarter on quarter I think because of the b. It takes that went.

But you have maintained your operational profitability guidance for the full year. So what are the margin levers left in play so that is giving you the confidence to maintain those margins a final question on Europe.

I think the acquisition that you have done of in semi Tech can you just talk to us about it.

On the first one I think.

And in the way, we see large deals is really helping us to build a foundation into the future and the wind sizes.

The overall when value is very strong at $3 2 billion at 71% very good to have the net new.

That gives us, let's say one one piece of the revenue into the future.

Equally there are digital programs or other programs, which are not something that clients are looking at in this environment and that takes away a little bit from the revenue. So that combined gives us the revenue outcome as we see it and as we even out as the outlook as we see it so that's how we win.

Put that together on the margin maybe on the margin I agree you have seen in August closure. One is we are of course, given our wage hike from firsthand that I'm not that's about 70 basis points.

After the drop in fact, we've got seven television had another impact of $30 million between revenue and cost because of the Mccamish incident as well. So that's actually a one 3% headwind we've compensated that at about 50 basis points of the project Maximus, which now is in full floor.

This is a cross we've talked about five tracks and many verticals and it's about basis points.

Which is from currency and then of course, there's a balancing around furloughs et cetera et cetera. So we actually I think a very strong underlying margin movement coming because of Maximus and of course, the wage hikes et cetera, well planned and known for and are leading to this margin.

GAAP for this quarter.

Yes.

We have a very large and growing engineering business, we don't probably talk about it as much here.

It's a business with working with leading engineering companies around the world and as you know semi con as a space, which is expected from today over 500 billion dollar market to grow about a trillion dollar and this is a very exciting business in terms of semiconductor chip design.

Working with leading fab nonfat players across the world and I think that you can give us firstly, a good entry into a new space and also a new set of clients, which we don't have so we're very excited about this.

Thank you.

The next question is from <unk> <unk> from Reuters news.

Good evening gentlemen.

First I wanted to understand now that client budgets have firmed up at least for the calendar year do you see what does the deal momentum look like are there any signs of improvement at all or at least I mean, do we expect things to look like they have so far.

And on the guidance I wanted to understand because it was 2.5%.

I wanted to understand if youre not seeing cancellations et cetera, why it was not at the upper end.

In terms of geographies I mean across its not obviously lindsey phenomena across the company's North America has obviously been impacted how much is that affecting you in is Europe sort of helping in any way.

I'm the hiring you said that, you know, it'd be in time. So is it fair to presume you will not be going to campuses this year and we can sort of expect head count to trend the way it has right now. Thank you.

And then the hiring you said that you know you'd be in time.

So is it fair to presume you would not be going to campuses. This year and we can sort of expect head count to trend the way. It has right now thank you.

So.

Maybe combining a few things

Maybe you can sort of combining a few things.

On what we're seeing for the budgets as the calendar starts, most of our comments are really on the financial year that we are looking at. The budget process has started and launched for many of our clients. It's still early in January, so it'll sort of work its way through.

On what we're seeing for the budget as the calendar year starts.

Most of our comments are really on the financial year that we're looking at the budget process.

Has started and launched for many of our clients it's 10.

Early.

In January and sort of work its way through.

At this stage, we don't see any change from what we were seeing last quarter, in that we don't see things becoming worse, we don't see any sort of change in that dynamic. We will have our own view of the next financial year as we come into the March, April timeframe when we'll have the April results. The guidance,

At this stage, we don't see any change from what we were seeing last quarter and that we don't see things, becoming worse, we don't see any sort of change in that dynamic.

We will have our own view of the next financial year as we come into the March April timeframe and allow the April.

Salt.

Speaker Change: The guidance.

Again, for us, it's been more of, we are seeing similar outlook to what we were seeing in the past quarter, but as we get closer to the end of the year, just the variability reduces, and that's how we've narrowed the guidance. So it's not a question of reducing the upper end, because in that sense, we've increased the lower end. So it's really quite balanced between what we were using last quarter and this quarter.

Speaker Change: Again for us it's been more of a.

Speaker Change: We are seeing similar outlook to what we were seeing in the past quarter, but as we get closer to the end of the year.

Speaker Change: The variability reduces and that's how we've narrowed the guidance and so it's not a question of reducing the upper end because in that sense. We've increased the lower end. So it's I.

Sydney: I would say, it's really quite balanced between what we were seeing last quarter and this quarter.

So, I just mentioned earlier, we continue to monitor the utilization and our flexi-hiring model, in fact, with COVID, which is both off-campus and on-campus. I think that's really been a new learning for us. So, it's really on demand, we can go behind any fresh demand comes in. And at this stage, of course, we're not seeing any immediate campus requirement, but for any volume increase, we have a very strong off-campus program as well now.

Speaker Change: The chemical side, yet so I like what I just mentioned earlier, we continue to monitor the utilization in our flexi hiring model in fact, but with Covid, which is bought off campus and on campus I think that'd be really being a new learning for us. So it really on demand. We can go behind that think of any interest demand comes in and at least.

Speaker Change: Of course, we're not seeing any immediate campus requirement, but any volume increase we have a very strong off campus program as well now.

Speaker Change: Thank you. The next question is from Hari Priya Surabhan from the Hindu business line.

Speaker Change: The next question is from Harry peers to rebound from the Hindu business line.

Speaker Change: Hi, guys. Sallil, could you give us some more color and the visibility in the market? We keep listening that the macro condition and the situation is bottom and out. Do you think so? And do you see any sort of green shoots? Or what is your reading like of which verticals do you expect to bounce back earlier? And on the margin front, do you see any impact if there is no tailwind from the currency depreciation? Given that Rupi has been flat for almost one year now, so.

Speaker Change: Hi, guys. Sallil, could you give us some more color and visibility on the market? We keep hearing that the macro conditions and the situation are bottom and out. Do you think so? And do you see any sort of green shoots? Or what is your reading like of which verticals do you expect to bounce back earlier? And on the margin front, do you see any impact if there is no tailwind from the currency depreciation? Given that Rupi has been flat for almost a year now, so...

Speaker Change: So Neil could you give us some more color on the visibility in the market, we keep listening that the macro condition and the situation is bottoming out do you think so and do you see any sort of green shoots.

Speaker Change: Well, what is your leading leg or which verticals do you expect a bunch back earlier and on the margin front or do you see any impact if there is no tailwind from the currency depreciation given that Adobe has been flat for almost one year now so.

Sallil: So on the, on the sort of outlook in the macro,

Speaker Change: So on the.

Speaker Change: On the sort of outlook in the macro.

Sallil: We don't have a view on where it is in terms of the cycle, what we really are focused on is how that's impacted our client decision making. And there we see...

Sallil: We don't have a view on where it is in terms of the cycle, what we really are focused on is how that's impacted our client's decision making. And there we see... you know, what we were sharing earlier, financial services, telco, high tech, we still see the impact. Equally, we see this in manufacturing, energy utilities and life sciences. There's a difference in geography as well as what we shared earlier between North America and Europe. So at this stage, there's no more view that we have than that. We're obviously... very positive with the deal wins we've got, a lot of those deals win in cost and efficiency. But they're also the wins that we've seen, for example, in the cloud, in SAP and these are areas that we have tremendous strength in. And so we feel good. And in generative AI is becoming more and more important in all discussions, when it's not a big revenue component, it's still becoming more and more important in all discussions.

Speaker Change: We don't have a view on where we're at is in terms of the cycle. What we really are focused on is how that's impacted our client decision, making and there we see.

Sallil: you know, what we were sharing earlier financial services, telco, high tech, we still see the impact. Equally, we see,

Speaker Change: What we were sharing earlier financial services Telco high Tech, we still see the impact.

Speaker Change: Equity, we see growth.

Sallil: in manufacturing, energy utilities, life sciences.

Speaker Change: Manufacturing energy utilities life Sciences.

Sallil: There's a difference in the geography as well as we shared earlier between North America and Europe.

There is a difference in the geographies as well as we said earlier between North America and Europe. So at this stage, there's no no more a view that we have then that.

Sallil: So at this stage, there's no more view that we have than that. We obviously...

Speaker Change: We obviously.

Sallil: very positive with the deal wins we've got, a lot of those deals win in cost and efficiency. But they're also the wins which we've seen, for example, in cloud, in SAP and these are areas which we have tremendous strength in. And so we feel good. And in generative AI is becoming more and more important in all discussions, when it's not a big revenue component, it's still becoming more and more important in all discussions.

Speaker Change: A very positive with the deal wins, we've got a lot of those deals were in cost of deficiency, but then also the wins, which we've seen for example in cloud and S&P in these areas, which we have tremendous strengthen and so we feel good and then generative AI is becoming more and more important.

Unidentified Speaker: I'm not hiding. You said that, you know, it'd be in time. So is it fair to presume you will not be going to campuses this year? We can sort of expect headcount to trend the way it has right now. Thank you. Maybe sort of combining a few things.

Speaker Change: And all discussions while there's not a big revenue component it still becoming more and more important all discussions.

Speaker Change: Yeah, on the currency side, we don't plan for actually any currency movement when we do our margin plans as well, so whatever comes on top of our currency benefit is that actually always a bonus. So, but our underlying plans don't reflect.

Speaker Change: Yeah on the currency side, though we don't plan for actually any currency movement. When we do our margin plans as well so whatever comes on top from a currency benefit of that actually all ways of bonus so but underlying plans don't reflect that.

Unidentified Speaker: On what we're seeing for the budgets as the calendar year starts, most of our comments are really on the financial year that we're looking at. The budget process has started and launched for many of our clients. It's still early in January, so it'll sort of work its way through.

Speaker Change: Thank you. The next question is from the Financial Express Samir Bakshi. Alo, sir.

Speaker Change: Thank you. The next question is from the financial express to meet Buckshee Elisa.

Samir Bakshi: Please correct me if I'm wrong. You said a lot of genie projects are in pipeline, right? And you have around 1 lakh genie I trained employees.

Samir Bakshi: Please correct me if I'm wrong. You said a lot of genie projects are in the pipeline, right? You have around 1 lakh genie trained employees.

Speaker Change: Please correct me if I'm wrong, you said a lot of generic products are in pipeline right.

And you have around one lakh Jimmy I trained employees.

Samir Bakshi: So why is this that we are seeing smaller and active clients, their number is falling?

Samir Bakshi: So why is it that we are seeing smaller and more active clients, their numbers are falling? If you look from a revenue perspective, which is more relevant, it's the larger clients who continue to grow well. Of course, there is a longer tail, you know, towards the 1500 plus clients. I mean, the biggest revenue chunk comes from the top 50 top 100 top 200.

Unidentified Speaker: At this stage, we don't see any change from what we were seeing last quarter in that we don't see things becoming worse. We don't see any sort of change in that dynamic. We will have our own view of the next financial year as we come into the March-April timeframe when we have the April results.

Speaker Change: So why is this that we have seen a small and smaller in active claims the number of Poland.

Speaker Change: The active claims.

Samir Bakshi: I think if you see from a revenue perspective, which is more relevant, it's the large clients who continue to grow well. Of course, there is a longer tail, you know, towards the 1500 plus clients. But I mean, the biggest revenue chunk comes from the top 50 top 100 top 200.

Speaker Change: The numbers I think if you see from a revenue perspective. It is more relevant it's the large clients who continue to grow well of course, there is a longer tail towards the 1500 plus clients, but I mean, the biggest revenue chunk comes from the top 50 top 100 top 200.

Unidentified Speaker: Again, for us, it's been more of, we are seeing similar outlook to what we were seeing in the past quarter, but as we get closer to the end of the year, just the variability reduces, and that's how we've narrowed the guidance, so it's not a question of reducing the upper end, because in that sense, we've increased the lower end, so it's, I would say it's really quite balanced between what we were seeing last quarter and this quarter. Yes, so like I just mentioned earlier, we continue to monitor the utilization and our flexi-hiring model, in fact, with COVID, which is both off-campus and on-campus, I think that's really been a new learning for us. So it's really on demand, we can't go behind any fresh demand comes in, and at this stage, of course, we're not seeing any immediate campus requirement, but for any volume increase, we have a very strong off-campus program as well now. Thank you. The next question is from Hari Priya Surebaan from the Hindu Business Line. Hi guys.

Speaker Change: Okay, thank you. Thank you. The next question is from Rukmini Rao from Fortune India.

Speaker Change: Okay. Thank you. Thank you.

The next question is from Rukmini, Ralph I'm fortunate India.

Rukmini Rao: Hi, thank you. I have two clarifications and a question. One, the 13 million impact of my chemist, it has been accounted for completely this quarter. Yes, between loss of revenue and in cost. Yes. Sure. Thanks. And the other one, you know, this is in continuation to what Bina asks. So, Salil, does it mean that, you know, I don't fathom how two companies can informally talk to each other? And if at all, Infosys has actually sort of written to appear raising certain concerns, it must be legal in nature. I mean, I'm guessing so.

Rukmini Rao: Hi, thank you. I have two clarifications and a question. One, the 13 million impact of my chemistry, has accounted for completely this quarter. Yes, between loss of revenue and in cost. Yes. Sure. Thank you. And the other one, you know, this is in continuation to what Bina asks. So, Salil, does it mean that, you know, I don't fathom how two companies can informally talk to each other? And if at all Infosys has sort of written to appear to be raising certain concerns, it must be legal in nature. I mean, I'm guessing so.

Rukmini: Hi, Thank you I have two.

<unk> any question one the 13 million impact of Mccamish. It has been accounted for completely this quarter, yes between lots of revenue and in cost yes, sure. Thanks and other one is.

Speaker Change: In continuation to what <unk> does.

Speaker Change: And then does it mean that you know I don't fathom, how two companies can informally talk with each other and if at all Infosys has actually sort of reach into peers raising.

Speaker Change: Concerns it must be legal in nature.

Speaker Change: And I'm guessing so so could you actually tell us whether you have had any sort of communication with your other peers when it comes to talent.

Rukmini Rao: So could you actually tell us whether you have had any sort of communication with your other peers when it comes to talent?

Rukmini Rao: So could you tell us whether you have had any sort of communication with your other peers when it comes to talent?

Speaker Change: on any of the, I think you're referring to the media report. That's right, that's right. We have no additional comments on that.

Speaker Change: On any of the I think you're referring to the media report today that we have no additional comments on that.

Speaker Change: But Sallil, I'm going back to the deal that didn't fructify, right?

Speaker Change: Uh huh.

Speaker Change: Yes.

Speaker Change: And going back to the deal that didn't stratified right.

Sallil: I just want to understand from you whether, you know, was it a client concern about enforcers' ability to be able to execute this deal or was it a client specific problem that you faced or the way large deals are getting structured or the checkboxes are the very last minute that are getting out of it. What really led to

Speaker Change: I just want to understand from you whether, you know, was it a client concern about enforcers' ability to be able to execute this deal or was it a client specific problem that you faced or the way large deals are getting structured or the checkboxes are the very last minute that are getting out of it. What really led to this deal not structifying and also some sense of the large deals. Is there any fundamental change that is happening to how vendors are being looked at by clients when it comes to closing large deals? Thank you. So on the way large deals are working in fact.

Just want to understand from you whether it was at a client concern about infosys has the ability to be able to execute this deal or was it a client specific product that you phased out.

Salil: Salil, could you give us some more color on the visibility in the market? We keep listening that the macro condition and the situation are bottoming out. Do you think so? And do you see any sort of green shoots?

Unidentified Speaker: What is your reading like? Which verticals do you expect to bounce back earlier? And on the margin front, do you see any impact if there is no tailwind from the currency depreciation given that the rupee has been flat for almost one year now? So on the sort of outlook in the macro, we don't have a view on where India is in terms of the cycle. What we really are focused on is how that's impacted client decision making. And there we see what we were sharing earlier, financial services, telco, and high tech. We still see the impact. Equally, we see growth in manufacturing, energy utilities, and life sciences. There's a difference in geographies as well, as we discussed earlier, between North America and Europe.

Speaker Change: The large deals are getting structured the check boxes. The very last minute that are getting out is what really led to this deal not fructify and also some center.

Sallil: this deal not structifying and also some sense of the large deals. Is there any fundamental change that is happening how vendors are being looked at by clients when it comes to closing large deals? Thanks. So on the way large deals are working in fact

Large deals is that any fundamental change that is happening how vendors are being looked at by clients. When it comes to closing large deals.

Speaker Change: On the way large deals are working in fact.

Sallil: In this quarter, in Q3, we've seen quite a few deals which are consolidation deals where we've been the beneficiary where clients are looking to consolidate to select partners or strategic partners. So that's one of the things that we are visibly seeing on the specific MOU, which was not completed. There is no additional comment. We made the comment as we made the statement as we had shared earlier. Thank you.

Speaker Change: In this quarter, in Q3, we've seen quite a few deals which are consolidation deals where we've been the beneficiary where clients are looking to consolidate to select partners or strategic partners. So that's one of the things that we are visibly seeing in the specific MOU that was not completed. I have no additional comments. We made the comments as we made the statement as we had shared earlier. Thank you. The deal flow is really good in the market. Because the way we look at it, at 3.2 billion, it's well above the average that we see for large deals in any quarter. With 70% net new, that's also very strong because that gives us good confidence that that is building out for the future.

In this quarter in Q3, we've seen quite a few deals which are consolidation deals where are we being the beneficiary where clients are looking to consolidate to select partners or strategic partners. So that's one of the things that we're visibly seen on the specific Mou, which was not good.

Bina: Pleated there is no additional comment we made the comment as we made the statement as we had shared earlier.

Sallil: The deal flow really in the market is good.

Bina: The deal flow really in the market is good.

Unidentified Speaker: So at this stage, there's no more view that we have than that. We are obviously very positive about the deal wins we've got. A lot of those deals win in cost and efficiency. There are also deal wins, which we've seen, for example, in cloud and in SAP. And these are areas which we have tremendous strength in. And so we feel good.

Sallil: Because the way we look at it, at 3.2 billion, it's well above the average that we see for large deals in any quarter. With 70% net new, that's also very strong because that gives us good confidence that that is building out for the future.

Bina: Because the way we look at it.

At $3 2 billion, it's well above the average that we see for large deals in any quarter with 70% net new that's also very strong because that gives us good confidence that that is building out for the future.

Sallil: I think that then you get coupled with you know there are digital programs which are

Speaker Change: I think then you get coupled with, you know, there are digital programs that are not happening or slowing down and that takes away a little bit from the possible benefits of these large deals and that's really the balance that we're working on. >uestion earlier saying that these are not a bit of a component of your revenue, right? But if you have another fear of your already calling on Gen. A.I. Of revenue that you're doing, when you see, I think it's also being used or call out the numbers or each time in revenue, do you sort of bear the curve when it comes to being able to do it? Wrap, generate ideas and make it, let's say substantial or be able to have a state-of-the-development starting project.

Bina: I think that then you'll get coupled with digital.

Bina: Digital programs, which are.

Unidentified Speaker: And then generative AI is becoming more and more important in all discussions. While it's not a big revenue component, it's still becoming more and more important in all discussions. On the currency side, we don't actually plan for any currency movement when we do our margin plans as well. So whatever comes on top from a currency benefit is actually always a bonus, but our underlying plans don't reflect that. Thank you. The next question is from the Financial Express columnist, Sameer Bakshi. Hello, sir.

Sallil: not happening or slowing down and that takes away a little bit from the possible benefits of these large deals and that's really the balance that we're working on.

Bina: Not happening or slowing down and that takes away a little bit from the possible benefits of these large deals and that's really the balance that we're working on them.

Sallil: question earlier saying that these are not a bit of a component of your revenue, right? But when you have another fear of your already calling on Gen.A.I. of revenues that you're doing, when you see I think it's also being used or call out the number or

Speaker Change: Yes.

Speaker Change: Is that not.

Speaker Change: Yeah that is.

Speaker Change: Thank you.

Speaker Change: Got it.

Speaker Change: Hi.

Speaker Change: Larry.

Speaker Change: Hey.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: All of this.

Sallil: each time in revenue, do you do you sort of bear in the curve when it comes to being able to do?

Unidentified Speaker: Please correct me if I'm wrong. You said a lot of Gen AI projects are in the pipeline, right? And you have around 1 lakh Gen AI trained employees. So why is it that we are seeing smaller and active clients; their number has fallen? Sir, in order and active clients, their number has fallen.

Speaker Change: Each site.

Got it.

Speaker Change: Yes.

Sallil: wrap, generate ideas and make it let's say substantial or be able to have a state-of-the-development starting project.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: Thanks, a lot.

Speaker Change: They would have stayed.

Speaker Change: Yes.

Sallil: So in generative AI, we have an extremely strong capability set, a lot of activity with our clients. For example, we are working with a large retail company on their AI first transformation. This is a very strategic work with the clients.

Speaker Change: So in generative AI, we have an extremely strong capability set, a lot of activity with our clients. For example, we are working with a large retail company on their AI first transformation. This is very strategic work with the clients. We are working with a large global bank in their risk area to use large language models to make that risk area better for them. We have a large number of such deals. We are not at this stage publicly sharing what Gen AI revenue is, but we have tremendous capabilities, a good leading market position, and we feel in a generative way we are very strong in the capabilities we build. For example,

Speaker Change: So in general it is a we have an extremely strong capability said lot of activity with our clients. For example, we are working with a large retail company on the AI first transformation. This is a very strategic.

Unidentified Speaker: I think if you look from a revenue perspective, which is more relevant, it's the large clients who continue to grow well. Of course, there is a longer tail towards the 1500 plus clients, but I mean, the biggest revenue chunk comes from the top 50, top 100, top 200. Okay, thank you. Thank you. The next question is from Rukmini Rao from Fortune India. Hi, thank you.

With the client we.

Sallil: We are working with a large global bank on their risk area to use large language models to make that risk area better for them. So we have a large number of such deals. We are not at this stage publicly sharing what the Gen AI revenue is, but we have tremendous capability, a good leading market position, and we feel

Speaker Change: We are working with a large global bank on the risk area to use large language models to make that risk area better for them. So we have a large number of such deals. We are not at this stage are publicly sharing what the gen.

Unidentified Speaker: I have two clarifications and a question. One, the 30 million impact of McCammish, has it been accounted for completely this quarter? Yes, between loss of revenue and cost, yes. Sure, thanks.

Speaker Change: <unk> AI revenue is but we have tremendous capability are good leading market position.

Unidentified Speaker: And the other one, you know, this is in continuation of what Bina asked. So, Salil, does it mean that, you know, I can't fathom how two companies can informally talk to each other. And if at all Infosys has actually sort of written to appear raising certain concerns, it must be legal in nature. I mean, I'm guessing so.

Speaker Change: We've seen.

Sallil: in generative way we are very strong in the capabilities we build. For example,

Speaker Change: In general.

Speaker Change: We are very strong and the capabilities. We built for example.

Sallil: There are a lot of large language models out there.

Speaker Change: There are a lot of large language models out there.

There are.

Speaker Change: Lot of large language models out there.

Sallil: There are several different use cases, different benefits and areas. We have many of them, for example, in

Speaker Change: There are several different use cases, different benefits and areas. We have many of them, for example, in customer service in analytics, in data, in software engineering, so a host of areas which we are working with clients.

Unidentified Speaker: So, could you actually tell us whether you have had any sort of communication with your other peers when it comes to talent? On any of these, I think you're referring to media reports. That's right, that's right.

There are several different use cases different benefits scenarios, we have many of them for example in.

Sallil: customer service in analytics, in data, in software engineering, so a host of areas which we are working with clients.

Speaker Change: Customer service and analytics and data and software engineering, so a host of areas, which we are working with clients on.

Sallil: We have also developed what we think is an appropriate approach for large enterprises, what we call the narrow transformer approach. Here, when you're looking at large companies, the interest is not just on consumer-generative AI. It's much more on what is going to make an impact to them with their data sets.

Speaker Change: We have also developed what we think is an appropriate approach for large enterprises, what we call the narrow transformer approach. Here, when you're looking at large companies, the interest is not just in consumer-generative AI. It's much more on what is going to make an impact on them with their data sets. And so which is the appropriate large language model you can use for their data set, depending on what the area is. I believe we have incredible capabilities in Topaz and our clients are also resonating with that capability. Today we are not calling out the value, the generative AI value, but that is a different subject. But I think the work we're doing has quite an impact. It's a mix of both, a large number of them are existing clients, we have good relationships, they have seen our capabilities that

Unidentified Speaker: So we have no additional comments on that. But Salil, and going back to the deal that didn't fructify, right? I just want to understand from you whether, you know, it was a client concern about Infosys' ability to be able to execute this deal, or it was a client-specific problem that you faced. Or the way large deals are getting structured or the checkboxes at the very last minute that are getting counted, what really led to this deal not fructifying? And also, in some sense, in large deals, is there any fundamental change that is happening, how vendors are being looked at by clients when it comes to closing large deals? Thanks.

Speaker Change: We have also developed what we think is an appropriate approach for large enterprises, what we call the narrow transformer approach.

Speaker Change: When you're looking at large companies. The interest is not just on consumer generative AI is much more on what is going to make an impact to them with their dataset and so which is the appropriate large language model you can use for their data center, depending on what the area is.

Sallil: And so which is the appropriate large language model you can use for their data set, depending on what the area is. So, I believe we have an incredible capability in Topaz and clients also resonating with that capability. We are not today calling out the value, the generative AI value today, but that is a different subject. But the work we're doing I think is quite impact.

Speaker Change: So we I believe we have an incredible capability and topaz and clients also resonating with that capability. We are not today, calling out the value degenerative AI value today, but that that is a different subject.

Speaker Change: Subject, but the work we're doing I think is quite impactful.

Sallil: It's a mix of both a large number of them are existing clients, we have good relationships they have seen our capabilities that

Speaker Change: Yes.

Speaker Change: I see.

Speaker Change: Okay.

Unidentified Speaker: So on the way large deals are working, in fact, in this quarter, in Q3, we've seen quite a few deals. We've seen deals that are consolidation deals where we've been the beneficiary, where clients are looking to consolidate with select partners or strategic partners. So that's one of the things that we are visibly seeing. On the specific MOU, which was not completed, there is no additional comment.

Speaker Change: Thanks.

Speaker Change: What.

Speaker Change: This molecule.

Speaker Change: Yes.

Speaker Change: It's a mix of both.

A large number of them are existing clients, we have good relationships they have seen our capability set and the.

Sallil: And they are, as I said, it's resonating. We've also done what we call a generative AI road show. It's a tour where we're taking all of our capabilities in the different locations around the world. And there are some new clients as well, where we are sort of first time doing generative.

Speaker Change: And they are, as I said, resonating. We've also done what we call a generative AI road show. It's a tour where we're taking all of our capabilities in different locations around the world. There are some new clients as well where we are sort of doing generative for the first time.

They are.

Speaker Change: As I said is resonating we've also done what we call the <unk>.

Speaker Change: Degenerative AI Road show.

Speaker Change: Tour, where we are taking all of our capabilities in the different locations around the world and there are some new clients as well, where we are sort of first time doing generate over here.

Speaker Change: Thank you. With that, we come to the end of this Q&A session. We thank our friends from media for being part of this press conference. Thank you, Salil. Thank you, Nilangin.

Speaker Change: Thank you.

Speaker Change: With that we come to the end of this Q&A session. We thank our friends from media for being part of this press conference. Thank you Phil and thank you Neil engine.

Unidentified Speaker: We made the comment as we made the statement, as we had shared earlier. The deal flow in the market is really good. Because the way we look at it, at $3.2 billion, it's well above the average that we see for large deals in any quarter.

Speaker Change: Before we conclude, please note that the archive webcast of its press conference will be available on the Infosys website and on our YouTube channel later today. Thank you and we request you to join us for some heighty outside. Thanks.

Speaker Change: Before we conclude please note that the archived webcast of this press conference will be available on the Infosys website and on our Youtube channel later today.

Unidentified Speaker: With 70% net new, that's also very strong because that gives us good confidence that this is building out for the future. I think that then you get coupled with, you know, there are digital programs which aren't happening or slowing down, and that takes away a little bit from the possible benefits of these large deals, and that's really the balance that we're working on. You mentioned earlier saying that digital deeds are not fit to be confident of your revenue, right? But when you have other spheres of yours already calling out Gen AI revenues that they are doing, when you see actually InfoCell being able to sort of call out this number or reach a size in revenues, do you think you are sort of on the curve when it comes to being able to draft a Gen AI deal and make it, let's say substantial or be able to have stateable revenues coming out of Gen AI?

And we request you to join us for some high to outside.

Speaker Change: Thanks.

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Speaker Change: Okay.

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Speaker Change: Yes.

Speaker Change: [music].

Unidentified Speaker: So generative AI, we have an extremely strong capability set and a lot of activity with our clients. For example, we are working with a large retail company on their AI-first transformation. This is very strategic work for the client. We are working with a large global bank on their risk area to use large language models to make that risk area better for them. So we have a large number of such deals.

Unidentified Speaker: We are not at this stage publicly sharing what our Gen AI revenue is, but we have tremendous capability, a good leading market position, and we feel confident. In generative AI, we are very strong in the capabilities we build. For example, there are a lot of large language models out there.

Unidentified Speaker: There are several different use cases, different benefit scenarios. We have many of them, for example, customer service, analytics, data, software engineering, so a host of areas which we are working with clients clients. We have also developed what we think is an appropriate approach for large enterprises, what we call the narrow transformer approach. Here, when you're looking at large companies, the interest is not just in consumer generative AI; it's much more on what is going to make an impact on them with their data set. And so, which is the appropriate large language model you can use for their data set, depending on what the area is.

Unidentified Speaker: So, I believe we have an incredible capability in Topaz, and clients are also responding to that capability. We are not today calling out the value of generative AI today, but that is a different subject. But the work we're doing, I think, is quite impactful. Do you also understand the genealogy that you're actually getting is from existing clients, or have you been able to get newer clients, maybe of smaller ticket sizes? Just to understand where... It's a mix of both.

Unidentified Speaker: A large number of them are existing clients. We have good relationships. They have seen our capability set, and they are, as I said, responding. We've also done what we call a generative AI roadshow. It's a tour where we take all of our capabilities to different locations around the world, and there are some new clients as well where we are sort of the first time doing generative.

Unidentified Speaker: Thank you. With that, we come to the end of this Q&A session. We thank our friends from the media for being part of this press conference. Thank you, Salil. Thank you, Nilanjan. Before we conclude, please note that the archived webcast of this press conference will be available on the Infosys website and on our YouTube channel later today. Thank you, and we request you to join us for some high tea outside. Thanks, Vishal. Thank you for watching. Thank you for watching.

Q3 2024 Infosys Ltd Earnings Call - Press Conference

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