Infosys Towpaths fabric re imagine the way, we deliver our services to enterprises, let me illustrate this with an example.
For one of our financial services client, who wanted to launch a new digital product.
Our small and medium enterprises in commercial banking space.
They estimated it they said that it would take about three months.
And then we said using emphasis topaz fabric, we can re imagine the way the digital products are built right from visual design to development to Harden collection believes and we were able to do all of these in a very short span of about two weeks, so topaz fabric and.
Enables us to deliver our services.
With much higher velocity with higher quality.
And with being responsible biodiesel.
Speaker #1: In the UK, this £1.6 billion deal expands our work in the healthcare sector. We will help the NHS leverage AI to streamline operations and improve patient care for UK citizens.
Salil Parekh: In the UK, this $1.6 billion deal expands our work in the healthcare sector. We will help NHS leverage AI to streamline operations and improve patient care for UK citizens. We have deepened our Topaz AI capability with an agent services suite called Topaz Fabric. This suite helps our clients manage and implement AI agents across the enterprise. We had strong momentum in AI adoption across our client base. Today, we work with 90% of our largest 200 clients to unlock value with AI. We're currently working on 4,600 AI projects. Our teams have generated over 28 million lines of code using AI. We've built over 500 agents. We're scaling our forward-deployed engineer team. We are now witnessing six AI-led value pools emerging that could unlock a large incremental opportunity. We also see productivity-led benefits that compress some legacy areas.
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Speaker #1: We have deepened our Topaz AI capability with an agent services suite called Topaz Fabric. This suite helps our clients manage and implement AI agents across the enterprise.
Hi, there, you'll speak to Zach and financial times, how can I help you today.
Krista Mckinney overseas around 25000 cases, a month and that can range from newspaper delivery of logging query or subscription renewal query.
Speaker #1: We have strong momentum in AI adoption across our client base. Today, we work with 90% of our largest 200 clients to unlock value with AI.
Offering more product most prescription type scenario with that complexity. It makes it more difficult for our agents as well that's actually how the AI can help us because it puts more and more context and makes it more likely that they're going to be able to answer customers' questions first time.
Speaker #1: We're currently working on 4,600 AI projects. Our teams have generated over 28 million lines of code using AI. We've built over 500 agents, and we're scaling our forward-deployed engineer team.
So very strategic partnership between F D N and Infosys grounded on our common passion for storytelling that also great opportunities for a very credible authentic sources like ft. You can create this hyper personalized experiences for the end customer you can apply AI to understand them too.
Speaker #1: We are now witnessing six AI-led value pools emerging that could unlock a large incremental opportunity. We also see productivity-led benefits that compress some legacy areas.
Deep into their behavior, what their expectations are.
Yeah.
Speaker #1: The six large AI-led value pools are AI engineering services, data for AI, agents for operations, AI software development and legacy modernization, AI deployed in physical devices, and AI trust and risk services.
The six large AI-led value pools are AI engineering services, data for AI, agents for operations, AI software development and legacy modernization, AI deployed in physical devices, and AI trust and risk services. We believe we are uniquely positioned to capture market share across these value pools and emerge as a leading AI value creator for global enterprises. We will share a comprehensive view of our approach at an Investor Day later this quarter. With a strong performance in this quarter, we have revised our revenue growth guidance for the financial year. The new revenue growth guidance for this financial year is 3% to 3.5 growth in constant currency. Our operating margin guidance for the financial year remains the same at 20% to 22. With that, let's open it up for questions.
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Customers behavior and be able to proactively offer things to them rather than be reaching out to you.
Speaker #1: We believe we are uniquely positioned to capture market share across these value pools and emerge as the leading AI value creator for global enterprises.
The emphasis projects really helped us to be able to sort through inquiries that we're getting and give the customer care agent as much context about the customer and their inquiry as possible.
Speaker #1: We will share a comprehensive view of our approach at an Investor Day later this quarter. With a strong performance in this quarter, we have revised our revenue growth guidance for the financial year.
I I is hugely useful not lactose is provide agents with Trump and the sponsors when theyre talking to our customers. It also allows them to categorize it more efficiency and more accuracy.
Speaker #1: The new revenue growth guidance for this financial year is 3% to 3.5% growth in constant currency. Our operating margin guidance for the financial year remains the same, at 20% to 22%.
Yeah.
The ability to understand customers what they want that's the proactive part of it and then the reactive part of it when they need from a customer care roadmap has to take care of what we really believe that Christa can become a competitive advantage at the octane through.
Speaker #1: With that, let's
Speaker #1: open it up for questions.
Speaker #2: Thank
Speaker #2: You, Salil. We will now open the floor for questions. Joining Salil is Mr. Jayesh Sanghrajka, Chief Financial Officer, Infosys. The first question is from Ritu Singh from CNBC TV.
Operator: Thank you, Salil. We will now open the floor for questions. Joining Salil is Mr. Jayesh Sanghrajka, Chief Financial Officer, Infosys. The first question is from Ritu Singh from CNBC-TV18.
Use of AI, we can imagine a world, where we already know what the customer wants to ask US a really really helps the customer it's got more volume when they talk to her and move out of you from the entire experience.
Speaker #2: 18. Hi, thank
Ritu Singh: Hi, thank you. Rishi, sorry, this is our only chance to speak with the management.
Speaker #3: You, and Rishi—sorry, this is our only chance to speak with the management. It's been an increase of 13 to 46 over just the last two quarters, and this is interesting because it's coming at a time when your peer, TCS, is cutting 30,000 jobs.
We've seen an increase of 13 to 46 over just the last two quarters. This is interesting because it's coming at a time when your peer, TCS, is cutting 30,000 jobs. How should we read into this? I mean, is this really? Because last quarter, you were telling us, for instance, there are segments like retail that remain the weakest link. So where are you seeing improvement that has led you to upgrade your guidance? That's one. Also, sequentially, we've seen a very light, you know, bit of a marginal dip in your margins, that is to 20.8. This is at a time when there are tailwinds emerging from the rupee appreciation. So if you could break down why that has been the case and why you continue to tell us about how you're uniquely placed to exploit that AI opportunity.
Emphasis as a partner is helping to challenge and implement our idea their experience from outside the F. T from different industry is helping us to really pinpoint and find the sweet spot between what the technology can do and what our customers need.
Speaker #3: How should we read into this? I mean, is this really—because last quarter, you were telling us, for instance, there are segments like retail that remain the weakest link.
We are super excited about the level of innovation, that's already been done and the customer service space I think we've just gotten started.
Speaker #3: So, where are you seeing improvement that has led you to upgrade your guidance? That's one. Also, sequentially, we've seen a very light, you know, bit of a marginal dip in your margins—that is, to 20.8%.
Yeah.
Okay.
Sure.
Speaker #3: This is at a time when, you know, there are tailwinds emerging from the repeat appreciation. So if you could break down why that has been the case, and why you continue to tell us about how you're uniquely placed to, you know, exploit that AI opportunity. And, you know, the likes of HCL Tech and TCS have been giving us concrete numbers.
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The likes of HCLTech and TCS have been giving us concrete numbers. Why does Infosys refrain from doing so? Thank you.
Speaker #3: Why does Infosys refrain from doing so? Thank you.
Speaker #1: So let me start. I think, on margin, Jayesh might have some points. I think the first part—I missed a little bit—it was the headcount increase,
Salil Parekh: So let me start, I think, on margin. Jayesh might have some points. I think the first part I missed a little bit. It was the headcount increase, right?
Hum.
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Uh huh.
Speaker #1: Right? Yeah. So on the, yeah, headcount increase—I think it demonstrates that we have confidence in where the market is and what we are seeing in terms of the demand.
Sure.
Jayesh Sanghrajka: Yeah.
Salil Parekh: Yeah. So on the headcount increase, I think it demonstrates that we have confidence in where the market is, what we are seeing in terms of the demand. And that also feeds in, in a way, to the second point you had in terms of how are we raising the guidance, the growth guidance. So first, in terms of the growth guidance, we are just finishing the Q3. So only one quarter is left. So we have had a lot of large deals in the previous few quarters. Plus, we had a very strong execution in this quarter. We have also seen. You asked a little bit about the industries. We've seen, for example, in Financial Services, and we've seen in energy, utilities, resources, and services.
Yes.
Okay.
Yes.
Uh huh.
Speaker #1: And that also feeds in, in a way, to the second point you had in terms of how are we raising the guidance, the growth guidance.
Yes.
Yeah.
Great.
Okay.
Hmm.
Yes.
Speaker #1: So first, in terms of the growth guidance, we are just finishing the third quarter, so only one quarter is left. So this, we have had a lot of large deals.
Hmm.
Hum.
Okay.
Speaker #1: In the previous few quarters, plus we had very strong execution in this quarter. We have also seen—you asked a little bit about the industries.
Okay.
Sure.
No.
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Speaker #1: We've seen, for example, in financial services, and we've seen in energy, utilities, and resources services. We see that the way the deals have come, the way we have become the AI partner of choice with our largest clients, we see a good outlook even as we look into the next financial year.
Hum.
Hmm.
Please go ahead.
Yes.
Yeah.
We see that the way the deals have come, the way we have become AI partner of choice with our largest clients, we see a good outlook even as we look into the next financial year. And that's in part helped us to increase the guidance, which is only for this financial year, which is for ending in March at the end. On margin, you want to?
Okay.
Yes.
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Yeah.
Yes.
Uh huh.
Speaker #1: And that's in part helped us to increase the guidance, which is only for this financial year, which is ending in March at the end.
Yeah.
Hmm.
Hum.
Hmm.
Speaker #1: On margin, you want to?
Okay.
Speaker #2: Yeah.
Speaker #2: So, first of all, a very happy New Year to all of you. Before I come to margin, I just wanted to also touch upon the headcount part.
Jayesh Sanghrajka: Yeah. So first of all, very happy New Year to all of you. Before I come to margin, I just wanted to also touch upon the headcount part. If you recollect, last year, we had called out that we are going to hire 20,000 freshers this year, right? And we have onboarded roughly around 18,000 freshers. And we are well on our way to finish our 20,000 number for this year, which in a way reflects in our headcount also because many of them are under training. And if you look at our utilization, including trainees, has come down. So that is our investment into building capacity for future in a way, right? So that's on the headcount. If you look at margins, we have expanded our margins this quarter by 20 basis points versus the last quarter.
Yes.
Sure.
Speaker #2: If you recollect, last year we had called out that we are going to hire 20,000 freshers this year, right? And we have onboarded roughly around 18,000 freshers, and we are well on our way to, you know, finish our 20,000 number for this year.
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Yeah.
Speaker #2: Which, in a way, reflects in our headcount also, because many of them are under training, and if you look at, you know, our utilization—including trainees—has come down.
Okay.
Yes.
Hum.
Uh huh.
Speaker #2: So that is our investment into building capacity for the future in a way, right? So that's on the headcount. If you look at margins, we have expanded our margins this quarter by 20 basis points versus the last quarter.
Okay.
Yeah.
Hmm.
Yes.
Yes.
Oh.
Okay.
Speaker #2: We are now on a nine-month basis. At a 21% margin, which is the midpoint of the guidance that we have given. The puts and takes of the 20 basis point expansion this quarter is that 40 basis points came from currency.
We are now on a nine-month basis at 21% margin, which is midpoint of the guidance that we have given. The puts and takes of 20 basis point expansion this quarter is 40 basis points came from currency, 50 basis points came from the Project Maximus, mainly on account of value-based selling and the lean and automation that we have done on multiple projects, offset by the furloughs and working day that we had. We also accrued a higher variable pay compared to last quarter, which was offset by some of the one-offs that we got. So that's the broad margin work in a way. But if you look at a nine-month period margin, which is 21%, we have invested in our sales and marketing, which has gone up by 50 basis points on a year-on-year basis. So that has been absorbed.
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Yes.
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Speaker #2: Fifty basis points came from Project Maximus, mainly on account of, you know, value-based selling and the lean in automation that we have done on multiple projects.
Uh huh.
Hum.
Hmm.
Thanks.
Yes.
Speaker #2: Offset by the furloughs and working days that we had. We also accrued a higher variable pay compared to last quarter, which was offset by some of the one-offs that we got.
Yeah.
Okay.
Hum.
Uh huh.
Speaker #2: So that's the broad margin work, in a way. But if you look at a nine-month period margin, which is 21%, we have invested in our sales and marketing, which has gone up by 50 basis points on a year-on-year basis.
Oh.
Uh huh.
Yeah.
Hmm.
Okay.
Speaker #2: So, that has been absorbed. In the margin, the lower utilization of almost 1% has been absorbed in our margin. So this margin is after absorbing all of that, where on one side we are building capacity for the future, and on the other side we are investing in sales and marketing.
Hum.
[music] mode.
In the margin, the lower utilization of almost 1% has been absorbed in our margin. So this margin is after absorbing all of that, where on one side we are building capacity for future, on the other side, we are investing in sales and marketing. And we still had a stable margin for that.
Sure.
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Speaker #2: And we still had a stable margin for that.
Hum.
Speaker #3: Do you have an outlook for next year now that you're completing this 20,000 for the year? You've had a lower attrition as well this quarter.
Ritu Singh: Do you have an outlook for next year? Now that you're completing this 20,000 for the year, you've had a lower attrition as well this quarter.
Hmm.
Thanks.
Yes.
Yeah.
Okay.
Speaker #2: We will have an outlook, you know, once we give our guidance.
Jayesh Sanghrajka: We will have an outlook once we give our guidance for next year in April.
Yeah.
Speaker #2: for next year in April. And also the
Hum.
Ritu Singh: Also the wage hikes, what's planned for the year and what kind of impact?
Speaker #3: Wage hikes, you know, what's planned for the year, and what kind of impact?
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Speaker #2: Next part yet. We will decide on that as we
Jayesh Sanghrajka: Next part yet. We will decide on that as we progress.
Okay.
Speaker #2: Progress. Yeah, on AI, I think one of
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Salil Parekh: Yeah. On AI, I think one of the points I shared, and we have a lot of that sort of information was.
Speaker #1: The points I shared, and we have a lot of that sort of information.
Hmm.
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Speaker #1: was. And then, Jayesh, this
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Mansee Dave: Jayesh, this is Mansee Dave from ET Now, ET Now Swadesh. My question is on demand visibility, tech spending, and AI adoption. Now, looking at the constant currency growth scenarios and commentary around fewer billing days and deal timing, how are clients thinking about calendar year 2026 tech spending, especially discretionary versus transformational-led programs? And at the same time, pace of enterprise AI adoption as well as tech spending outlook are among the key monitorables which we were looking toward. How does the scenario look like, and how are the pricing models evolving according to you?
Speaker #3: Is Mansi Dave from 18Hour. 18Hour Swadesh. My question is on demand visibility, tech spending, and AI adoption. Now, looking at the constant currency growth scenarios and commentary around fewer billing days and deal timing, how are clients thinking about calendar year 2026 tech spending, especially discretionary versus transformational-led programs?
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Speaker #3: And at the same time, pace of enterprise AI adoption as well as tech spending outlook are amongst the key monitorables which we were looking towards.
Yes.
Okay.
Okay.
Okay.
Speaker #3: How does the scenario look like, and how are the pricing models evolving according to—
Okay.
Speaker #3: You? So I'll start with that,
A very good evening, everyone and wishing you all a very happy new year.
Salil Parekh: So I'll start with that, maybe a little bit on the pricing. Jayesh might have some views. On the demand, we see good demand outlook in the sense of we have had strong large deals. Our large deals pipeline remains healthy. And we are seeing in the two industries that I mentioned, on Financial Services, on an energy, retail, sorry, energy, resources, utility services, a way that our work on AI is going and the way the deals have shaped up, we see a good outlook as we look even beyond this financial year into the next financial year. On Financial Services specifically, we see discretionary spend and good traction in what we are seeing across the market. Having said that, overall, we want to still see all of the other industries and segments start to show that. But these two are definitely something that we are seeing today.
Speaker #1: Maybe a little bit on the pricing, Jayesh. Mahindra has some views. On the demand, we see a good demand outlook in the sense that we have had strong large deals.
Thank you for joining US today my name is Rishi and on behalf of Infosys I'd like to welcome all of you.
As always since this is the new year My rules don't really change one question from each media House, we try all of it.
Speaker #1: Our large deals pipeline remains healthy. And we are seeing, in the two industries that I mentioned—on financial services and on energy, retail, sorry, energy resources utility services—a way that our work on AI is going.
But with that let me invite our chief Executive Officer, Mr. <unk> Parikh for his opening remarks over to you sell them.
Thanks, Rishi, it's good to see that they are very consistent and I'm sure the media opinions as well.
Good afternoon, everyone and thank you for being here warm wishes for the new year to all of you.
Speaker #1: And the way the deals have shaped up, we see a good outlook as we look even beyond this financial year into the next financial year.
<unk> had a strong performance in Q3.
Speaker #1: On financial services specifically, we see discretionary spend and good traction in what we are seeing across the market. Having said that, overall, we want to still see all of the other industries and segments start to show that.
Revenue grew <unk>, 6% sequentially and one 7% year on year in constant currency terms.
Large deals were at $4 8 billion with 57% net new.
This was across 2016.
Speaker #1: But these two are definitely something that we are seeing today.
Adjusted operating margin was 21, 2%.
Speaker #2: Yeah, and on the pricing, I think, you know, as newer and newer technology evolves, every time there is a change like that, you see a new pricing model evolving as well.
Jayesh Sanghrajka: Yeah. And on the pricing, I think as the newer and newer technology evolves, every time there is a change like that, you see a new pricing model evolving as well. We are seeing multiple new pricing models evolving. Some of them are being led by us, whether it is outcome-based pricing or whether it is pricing which is specific to agents, et cetera. So a little early in my mind in terms of calling out specifically what are the pricing models going to evolve on this. But everybody is testing new pricing models at this point in time.
We generated free cash flow of $915 million.
One of the most significant large deals we won was with the National Health service in the UK.
Speaker #2: We are seeing multiple new pricing models evolving. Some of them are being led by us. You know, whether it is outcome-based pricing or whether it is, you know, pricing which is specific to agents, et cetera.
This $1 6 billion dollar deal.
Expands our work in the healthcare sector.
Speaker #2: So, a little early in my mind in terms of calling out specifically what are the pricing models going to evolve on this. But everybody is testing new pricing models at—
We will help NHS leverage AI to streamline operations.
And improve patient care for UK citizens.
Speaker #2: this point in time. Thank
Speaker #1: You. The next question is from Srishti Achar from The Economic.
Operator: Thank you. The next question is from Shristi Achar from The Economic Times.
We have deepened our topaz AI capability within agent services suite called Topaz fabric.
Speaker #1: Times. Hi, happy New Year to all of you.
Shristi Achar: Hi. Happy New Year to all of you. So a couple of quick questions. One, I wanted to know on the sharp decline in operating margins that we're seeing. So I want to know if the impact is beyond the Labor Code charges that the company has taken. And I also wanted to know in terms of there has also been a sequential decline in your top contribution, revenue contribution from your top five, and top 10 clients. So can you give us a sense of why that is happening and what the next couple of quarters look like on that? On the third, I also wanted to know, sorry, this is the last one. So I also wanted to know in terms of the whole H-1B row that is going on. So this morning also, we saw some claims of employees being deployed on the same as well.
Speaker #3: you. So a couple of quick questions on one, I wanted to know in the sharp decline in operating margins that we're seeing, so I want to know if the impact is beyond the labor code charges that the company has taken.
This suite helps our clients manage and implement AI agents across the enterprise.
Speaker #3: And I also wanted to know, in terms of—there has also been a sequential decline in your top contribution, revenue contribution from your top five and top ten clients.
We had strong momentum in AI adoption across our client base to it.
Navy work with 90% of our largest 200 clients to unlock value with AI.
Speaker #3: So, why? Can you give us a sense of why that is happening, and what the next couple of quarters look like on that? On the third, I also wanted to know—as far as this is the last one.
Currently working on 4600 AI projects, our teams have generated over 28 million lines of code using AI. We've built over 500 agents with scaling our forward deployed engineer team.
Speaker #3: So I also wanted to know, in terms of, you know, the whole H1B row that is going on. So this morning also, we saw some claims of, you know, employees being deported on the same as well.
Speaker #3: So, I wanted to just know what is going on around that.
I wanted to just know what is going on around that.
We are now witnessing six AI led value pools emerging that could unlock a large incremental opportunity.
Speaker #1: Yeah, so if you look at the margins, if you're looking at reported margins, yes, the reported margins were impacted because of labor code. But if you look at the adjusted margins, as we have called it out also, the adjusted margins have actually expanded if you exclude the impact of labor code.
Jayesh Sanghrajka: Yeah. So if you look at the margins, if you're looking at reported margins, yes, the reported margins were impacted because of the Labor Code. But if you look at the adjusted margins, as we have called it out also, the adjusted margins have actually expanded if you exclude the impact of Labor Code. So adjusted margins have expanded by 20 basis points sequentially. And on a full-year basis, it's remained 21%, which is similar to our last year margins. And that, as I said earlier, that was despite, after absorbing the investment that we have done in sales and marketing, which would have impacted margins by 50 basis points. After absorbing the impact of lower utilization, which is building capacity for future. So after absorbing both of that, we have been able to maintain margins. You had a second question?
We also see productivity led benefits that compressed some legacy areas.
The six large AI led value pools.
AI engineering services data for AI <unk>.
Speaker #1: So, adjusted margins have expanded by 20 basis points sequentially. And on a full-year basis, it's remained at 21%, which is similar to our last year's margins.
<unk> four operations.
Software development and legacy modernization.
Speaker #1: So, and that, as I said earlier, that was despite, after absorbing the investment that we have done in sales and marketing, which would have impacted margins by 50 basis points.
<unk> deployed in physical devices, and AI Trust and risk services.
We believe we are uniquely positioned to capture market share across these valuables and emerge as a leading AI value creator for global enterprises.
Speaker #1: After absorbing the impact of lower utilization, which is building capacity for the future—so, after absorbing both of that—we have been able to, you know, maintain margins.
Speaker #1: You had a second question?
I will share a comprehensive view of our approach at an Investor day later this quarter.
Salil Parekh: Client contribution.
Speaker #1: Yeah, client contribution. Client contribution—I think sequentially, client contribution is not a way to see, in my mind, because there is a seasonality involved, right?
Jayesh Sanghrajka: Yeah, client contribution. I think sequentially, client contribution is not a way to see in my mind because there is a seasonality involved, right? Every Q3, you typically have furloughs, et cetera, which would have impact certain specific clients. Larger the clients, larger will be the impact of furloughs if there is one in that account. Typically, you will see that year on year, and we don't really see a significant change in the year-on-year client metrics.
With a strong performance in this quarter, we have revised our revenue growth guidance for the financial year.
Speaker #1: Every Q3, you typically have furloughs, et cetera, which would have impacted certain specific clients. And the larger the clients, you know, the larger would be the impact of furloughs if there is one in that account.
The new revenue growth guidance for this financial year is 3% to three 5% growth in constant currency.
Speaker #1: Typically, you will see that year on year, and we don't really see a significant change in the year-on-year client metrics.
Our operating margin guidance for the financial year remains the same at 20% to 22% with that let's open it up for questions. Thank you Sally we will now open the floor for questions. Joining Selim is Mr. Dave Congrats Scott Chief Financial Officer of Infosys. The first question is from reducing from CNBC debating.
Speaker #2: On your last question, I just want to reiterate that no Infosys employee has been apprehended by any US authority. A few months ago, one of our employees was denied entry into the US and was sent back to India.
Salil Parekh: On your last question, I just want to read out, no Infosys employee has been apprehended by any US authority. A few months ago, one of our employees was denied entry into the US and was sent back to India.
Operator: Thank you. The next question is from Chandra Srikanth from Moneycontrol.
Alright, Thank you and Rishi sorry. This is our only chance to speak with the management every quarter. So we'll have to exceed that one question limit with.
Speaker #1: Thank you. The next question is from Chandra Shrikant from Money.
Speaker #1: Control. Hi
Chandra Srikanth: Hi, sorry, just to follow up to that. Employee who wasn't allowed and sent back, are you contesting that in any form?
Speaker #3: Sir, this is the follow-up to that. The employee who wasn't allowed and was sent back—are you contesting that in any way?
You know southern Ninja shop to begin with I wanted to just talk with your head count number we've seen an increase of 13 246 over just the last two quarters and this is interesting because it's coming at a time when your peer Tcs. He's talking 30000 jobs, how should we read into this I mean, it's just a real indicator of how you see the demand environment.
Speaker #3: form? We have
<unk>, improving and with that I wanted to get your guidance figure being leased your 3% to 3.5% how much of that upgrade is because if you do large deals like NHS being factored in how much of the Lucent acquisition, which is yet to be completed as we understand is baked into that number and you know because last quarter you were telling us for instance in our segments.
We did that remain the weakest link so where are you seeing improvement that has led you to upgrade your guidance. That's one Oh also sequentially. We've seen a very light are you a bit of a marginal deep in your margin studies do 28. This is the time when you know that all tailwind emerging from the rupee depreciation so if you could breakdown.
Salil Parekh: We have a set of areas. We are also looking sort of in geographies which are new. We are looking at expanding in some service areas where we can go deeper. So that will continue. Code has impact across multiple aspects, whether it is gratuity, whether it is other aspects of wage. And that has been accrued. And that has been accrued. There will be an ongoing.
Speaker #1: A set of areas we are also looking, sort of, in geographies which are new. We are looking at expanding in some service areas where we can go deeper.
That has been the case and why you continue to tell us about how you're uniquely placed to exploit that opportunity and you know the likes of E. T O Tex in D. C has been giving us concrete numbers why does emphasis refrained from doing so thank.
Speaker #1: So that will continue.
Speaker #2: Code has impact across multiple aspects, whether it is gratuity, whether it is, you know, other aspects of which. And that has been accrued. And that has been accrued.
Thank you.
Let me start I think on margin dish might have some points.
The first part I missed a little bit it was a head count increase right. Yeah. So on the head count increase I think it demonstrates that we have confidence in where the market is what we are seeing in terms of the demand and that also feeds in the way to the second point you had in terms of how are we raising the guidance of the group.
Speaker #2: There will be an ongoing.
Guidance so first.
In terms of the growth guidance, we are just finishing the third quarter. So only one quarters left so this.
We have had a lot of large deals in the previous few quarters.
Last we had a very strong execution in this quarter.
We've also seen you asked a little bit about the industries. We've seen for example in financial services and we've seen in energy utilities resources <unk> services, we see that the way the deals have come the way we have become.
Speaker #3: Passion plan—yeah, that started, and what is that looking like? Thank you.
Speaker #3: Passion plan—yeah, that started, and what is that looking like? Thank you. On the first.
Chandra Srikanth: Planning. Has that started and what is that looking like? Thank you.
Salil Parekh: On the first one, I think on H-1 and any visa situation. We are continuing with our deployments and our delivery using a mix of what we have, work in the US and work in India. So no changes to that approach.
Speaker #1: One, I think we are on H-1 and what the recruit—any visa situation. We are continuing with our deployments and our delivery using a mix of what we have: work in the US and work in India.
AI partner of choice with our largest clients, we see a good outlook, even as we look into the next financial year and that's in part helped us to increase the guidance. We just only for this financial year, which is a four ending in March at the end on margin one of them. Yeah. So just first of all a very happy new year.
Speaker #1: So, no changes to that approach. At this stage, we are continuing with our process because there's an existing—yeah, no comment from my—
Chandra Srikanth: Newer applications? No.
Salil Parekh: At this stage, we are continuing with our process because there's an existing.
To all of you.
Before I come to the margin I just wanted to also touch upon the had gone, but if you recollect last year, we had called out that we are going to hire 20000, Freshers. This year right and we have onboard it duffy around 18000 fresher than we are well on our way too.
You know finish our 20000 number for this year.
In no way reflects and I had gone also because many of them are entertaining and if you look at you know our oh that utilization, including trainees has come down so that is an investment into building capacity for future and that way right. So that's that's only had gone if you look at margins, we have expanded our margins this quarter by 20 basis points.
As the last quarter, we are now on a nine month basis at 21% margin, which is midpoint of the guidance that we give it.
Jayesh Sanghrajka: Yeah. No comment from my side.
Speaker #1: side. Thank you, Hopia.
Puts and takes up to a 20 basis point expansion. This quarter is 40 basis points came from guaranty.
Operator: Thank you, Chandra. The next question is from Avik Das from the Business Standard.
Speaker #2: The next question is from Avik Das from The Business Standard.
50 basis points came from the project Maximus, mainly on account of value based selling and the.
Speaker #3: Thank you. North America seems to have degrown on a constant currency basis. Is there any specific reason for this? Was it client-specific, or was it any sector-specific—maybe retail—that pulled it down?
Avik Das: Thank you. North America seems to have degrown in a constant currency basis. Any reason? Was it a client-specific, or was it any sector-specific? Maybe retail that pulled it down, if you can just throw some more light. And Jayesh, there seems to be that idea that new large deals will be smaller or maybe far and few to come by as more AI-led deals sort of take the center stage.
Lean and automation that we have done on multiple projects offset by the furloughs and working there that we had we also accrued a higher Lady will pick on Baidu last quarter, which was offset by some of the one offs that we got so that's that's the broad.
Margin walking away, but if we look at the nine months period. Our margin was just for anyone Bullshit me have invested in our sales and marketing, which has gone up by 50 basis points on a year on year basis. So that has been absorbed in the margin the lower utilization.
Almost a one person has been absorbed.
Speaker #3: If you can just throw some more light. And Jayesh, there seems to be that—the idea that new large deals will be smaller, or maybe far and few to come by as more AI-led deals sort of take the center stage.
In our margins. So this margin is after absorbing all of that were on one side. We are building capacity for future on the other side, we are investing in sales and marketing you still had a stable margin do you have an outlook for next year now that you're completing this 20000 city up you've had to lower attrition as well this quarter. We will have an outlook once we give our guidance for next.
Speaker #3: Keeping the mortgage area.
Third in April and also the wage hikes are you know what's planned for beyond what kind of impact that could have on the margins from here. So we just finished one cycle of a wage which was in two button in January and in April we haven't yet decided on the next part yet we will decide on that as we progress.
Yeah.
Yeah on AI I think one of the points I shared and we have a lot of that sort of information was with our largest 200 clients with over 90% of them were doing AI work.
Salil Parekh: The mortgage area. So overall, pretty strong. Some are stronger, some are less strong, but overall, we see a good demand environment. There's good adoption of AI across the spectrum with our large Financial Services clients. We recently announced, for example, a partnership with Cognition, which is very strong, and we are working with them jointly in some of the Financial Services companies. On North America, nothing very specific. It's a mix of different industries and different plays. The overall situation on energy, utilities, and Financial Services remains strong. On some of our other verticals, remains something that is coming back over time, but not yet. On the third, on the margin.
Speaker #2: So overall, pretty strong. Some are stronger, some are less strong, but overall we see a good demand environment. There's good adoption of AI across the spectrum with our large financial services clients.
What we're doing in AI is unique.
Speaker #2: We recently announced, for example, a partnership with Cognition, which is very strong, and we are working with them jointly in some of the financial services companies.
Unique AI services.
As with clients and also with V shape, all of our existing services leveraging AI and for example, we are using agents in several of our service lines to help enhance either growth or productivity. So that's what we are shedding in terms of what that impact is.
Speaker #2: On North America, nothing very specific. It's a mix of different industries and different players. The overall situation on energy, utilities, on financial services remains strong.
Yeah.
Thank you. The next question is from months CW from E T now.
Speaker #2: On some of our other verticals, 'remains' is something that is coming back over time, but not yet.
Good afternoon Salomon James This is months he does it from eating out or eating out of Asia. My question is on demand visibility tech spending and AI adoption now looking at the constant currency growth scenarios and Comanche around fewer billing days and deal timing how are clients thinking about calendar year 'twenty 'twenty six tech spending.
Speaker #2: Yeah, on the third, on the margin. Large deals, you know, if you look at the deals that we have signed, we have signed $4.8 billion this quarter.
Jayesh Sanghrajka: Yeah. On the large deals, if you look at the deals that we have signed, we have signed $4.8 billion this quarter. If you look at even on a nine-month basis, compared to the last year, our large deal signings have gone up. So while there is always a productivity ask that goes up because of AI, et cetera, there is also a lot of deals that are getting.
Speaker #2: If you look at, even on a nine-month basis compared to last year, you know, our deals—large deal signings—have gone up. So, while there is always a productivity ask that goes up because of AI, et cetera, there are also a lot of deals that are getting.
Especially discretionary let's since transformational programs and at the same time piece of enterprise adoption as well as tech spending outlook amongst the key monitor blends, which we were looking to what how does the scenario looks like and how is the pricing model evolving evolving according to you.
So I'll start with that maybe a little bit on the pricing a jazzman out some views on the demand we see a good demand outlook.
So we have a strong large deals our largest pipeline remains healthy.
And we are seeing in the.
Two industries that I mentioned on financial services.
Energy retail energy sources utility services.
A way that our work on AI is going and the way the deals have shaped up we see a good outlook as we look even beyond this financial year into the next financial year on financial services, specifically, we see discretionary spend and good traction in what we are seeing across the market.
Having said that overall, we want to still see all of the other industries and segments start to show that but these two are definitely something that we are seeing today.
Speaker #3: Contributing to.
And on the pricing I think you know as a newer and newer technology well every time, there's a change like that you'll see a new pricing model evolving is that we are seeing multiple new pricing model evolving some of them are being led by us.
Whether it is outcome based pricing or whether it is you know pricing, which is specific to agents, etc. So early in my mind in terms of calling out specifically what are the pricing model is going to evolve on this but everybody is testing new pricing models at this Monday.
The next question is from <unk> from the economic times.
Happy new year.
Couple of quick questions and one I wanted to know when the sharp decline in operating margins that we see so I wanted to know what the impact is beyond the labor good charges that the company has taken.
Speaker #2: The team is really active on that. We've also got some good traction within manufacturing on the engineering part. And on the discretionary spend overall—so, first, on financial services, we are definitely seeing that, and what we shared earlier.
Salil Parekh: Team is really active on that. We've also got some good traction within manufacturing on the engineering part.
And I also wanted to know in terms of Theres always going to a sequential decline in your top contribution revenue contribution from it I'll find up 10 times, who buy can you give us a sense of why that is happening and what the next couple of quarters look like on that.
And I also wonder if the newest I'm sorry. This is lane. So I also wanted to know in terms of our P&L.
Jayesh Sanghrajka: Project for 2024.
On tech budgets.
Jayesh Sanghrajka: Discretionary spend.
On the discretionary spend overall, so first, on Financial Services, we are definitely seeing that what we shared earlier. We are seeing a good set of deals which have happened. And then we see that with the AI traction we have in that industry, we will become more the next financial year; we'll have better outcomes than this financial year on that. And Financial Services is going well this year. Similarly, on energy and utilities, we are seeing a good set of deals that have come together across the whole industry vertical. And that is helping us with that momentum. So those are the ones we are seeing. On the others, we are not seeing any deterioration, which is one sign. And we see overall, the macro environment seems to be where people are expecting maybe some interest rate cuts. So we'll see if that happens, especially in the US.
He knows a hall H one below that is going on this.
Morning, also we saw some claims all.
Employees being on the same is that so I wanted to just know what all is going on at on that.
Speaker #2: We are seeing a good set of deals which have happened, and then we see that with the AI traction we have in that industry, we will become more—the next financial year, we'll have better outcomes than this financial year on that.
That's how they work with.
Yeah. So if you look at the margins if you're looking at reported margins. Yes. The reported margins were impacted because of labor code, but if you look at the adjusted margins as we have called it out also via just as margins have actually expanded.
Speaker #2: And financial services is going well this year. Similarly, on energy and utilities, we are seeing a good set of deals that have come together across the whole industry vertical, and that is helping us with that momentum.
If we exclude the impact of labor costs I, just imagine have expanded by 20 basis points sequentially.
And on a full year basis. It remains of any one person which is similar to a.
Last year margins, so and that as I said earlier that was despite after absorbing the investment that were done in sales and marketing, which will impact the margins by 50 basis points. After absorbing the impact of lower utilization, which is building capacity for future. So after absorbing bolt up that we've been able to maintain margins.
Speaker #2: So those are the ones we are seeing. On the others, we are not seeing any deterioration, which is one sign. And we see overall, the macro environment seems to be where people are expecting maybe some interest rate cuts.
Speaker #2: So we’ll see if that happens, especially in the US. And then some of the other expansions we are doing—for example, we have a program where we’re working with some of our smaller sets of clients, and those are growing pretty well.
You had a second question line contribution client contribution I think sequentially client contribution is a is not a way to see in my mind because there is a seasonality involved right. Every Q3, you typically have furloughs et cetera, which would have impact certain specific clients and larger the clients in a larger will be the impact of furloughs. If there is one in datacom typically.
And then some of the other expansions we are doing, for example, we have a program where we're working with some of our smaller sets of clients. And those are growing pretty well. So overall, we feel that as we look out into the next year, these are things that support our growth. Then on AI itself, we are seeing what I shared earlier, these six areas where we see potential good growth over the next several years, not just in the next year. And that will, as we start to execute on that, that will help us. On Cognition.
Speaker #2: So overall, we feel that as we look out into the next year, these are things that support our growth. Then, on AI itself, we are seeing what I shared earlier—you know, these six areas where we see potential good growth over the next several years, not just in the next year.
You will see that year on year, and we didn't really see a significant change in the euro neocon matrixes.
On your last question I, just wanted to read out.
Infosys employee has been apprehended by any U S authority a few months ago. One of our employees was denied and G into the U S and was sent back to India.
Speaker #2: And that will, as we start to execute on that, that will help us. On Cognition—so, which one was that?
Salil Parekh: Sorry.
So which one was that?
Jayesh Sanghrajka: Cognition.
Speaker #2: Cognition, right? On Cognition. Cognition, so it's not so much a gap. So what the Cognition people are doing is they've built an agent which is working to do software development.
Cognition, right? On Cognition, so it's not so much a gap. So what the Cognition people are doing is they've built an agent which is working to do software development. And we are working with our clients as a partner with them where we are also doing, we are building agent capacity, and we are enabling those agents to work in a client environment. So the advantage is we have a detailed understanding of how the client technology landscape is set up, and we have a good understanding of what are the industry constraints or opportunities. And that combined with the software agent with Cognition becomes a very powerful combination in many clients. So that's something that will expand quite nicely.
Yeah.
Thank you.
The next question is from Chandra she comes from under control.
Uh huh.
Employee who wasn't allowed and sent back are you contesting that in any form.
Speaker #2: And we are working with our clients as a partner with them, where we are also building agent capacity, and we are enabling those agents to work in a client environment.
Secondly, you know one of the big change this quarter, we've seen them is a big acquisition from <unk> foods.
Radio quiet and called out for 2.25 billion lowest D. C. S has acquired a coastal class a $700 million. So can we expect more action on the M&A front are.
Speaker #2: So, the advantage is we have a detailed understanding of how the client technology landscape is set up, and we have a good understanding of what the industry constraints or opportunities are.
Are these you know I'd say, it's not attractive if you can take us through your land in each strategy. Thank you.
Speaker #2: And that, combined with the software agent with Cognition, becomes a very powerful combination in many clients. So that's something that will expand quite nicely.
On M&A.
So we have as we've looked at over the last few quarters, we've done acquisitions on cyber on consulting in energy services, and we will continue with that sort of an approach.
Operator: Thank you. The next question is from Justin [inaudible] from the Mint.
Speaker #1: Thank you. The next question is from
Speaker #1: just. Good evening, sirs.
We have a good pipeline of possible companies that we're looking at and discussions we have a.
[Analyst] (Mint): Good eventing, sir. Just two-pronged question. In what segments and for what clients will you all be using these AI software engineers? And how will this impact delivery? How will this impact billing? And more importantly, how will it impact future hiring? That is FY 2027 onwards, considering you're using a lot of these AI software engineers to work in client projects actively.
Speaker #4: Just a two-pronged question. In what segments and for which clients will you all be using these AI software engineers? And how will this impact delivery?
Strong support in terms of our balance sheet. So we will continue with that it's not something that is different in that sense from what we were doing in the past we have a.
Speaker #4: How will this impact billing? And, more importantly, how will it impact future hiring—that is, FY27 onwards? Considering you're using a lot of these AI software engineers to work in client projects, actively.
Instead of areas. We're also looking at.
Sort of in geographies, which are new we're looking at expanding in some service areas, where we can go deeper so that will continue on that.
Speaker #1: So what we see there, first—essentially, every industry, every client, over time. So it's a function of what is the
Speaker #1: So, what we see there first—essentially, every industry, every client over time. So it's a function of what is the client. Yeah, we will...
Salil Parekh: So what we see there first across essentially every industry, every client over time. So it's a function of what is the client. We will announce, as we do in April, our billing.
Monday I see any any other details that you can share.
That's that's what I had to share.
Thank you James Sorry, just one thing on the Labor code. So according to yours factsheet in pushes as incurred 1200 <unk> children are currently live because you'll have the full impact been absorbed hub are really sort of be staggered how how will that work. So whatever it is to be accrued in this quarter.
Rent has been accrued on the books right, which is for the labor court has impact across multiple aspects, whether it is going to be whether it is other aspects of wage and that has been accrued there will be an ongoing impact of roughly around 15 basis points that will happen on an annual basis that is a regular impact of the labor Court as we go ahead.
Alright, Thanks to answer the next question is from Harry preparation from Reuters News.
Good evening, a few questions one on the H one B front will you be looking at making new applications or is it primarily just hiring in the U S and the employees that you have already in retail is that specifics off just because of how America is right now and when do you sort of see that recovery and Todd is solid.
<unk> done for a CEO ends in March 27, and that used to find out what the succession planning that started in what is that looking like thank you.
Speaker #2: Announce, as we do in April, our billing. What was the question? It will be the value that we create driving the billing. So a lot of these things will be based on the traditional ways, as Jayesh was saying, of billing.
On the first one I think we are.
Each one and what the recruiting is and so our approach is very clear we have as we've shared in the past.
Majority of our employees in the U S who are not requiring.
Any of these situations, we are continuing with our deployment and delivery using a mix of what we have.
Jayesh Sanghrajka: What was the question?
Billing.
Work in the U S and work in industrial or changes to that approach.
Salil Parekh: It will. The value that we create will drive the billing. So a lot of these things will be based on the traditional ways, as Jayesh was saying, of billing. And a lot over time will change as the AI market itself develops. So today, there is not any immediate change, but over time, we'll see that.
No.
At this stage, we are continuing with our process because there's an existing set we will examine it as it comes up.
Speaker #2: And a lot, over time, will change as the AI market itself develops. So, today, there is not any immediate change. But over time, we'll see that.
In the future.
On retail are what we are seeing is that.
There is.
Some places where we see positives and there are some places where we see a.
Operator: Thank you, Just. The next question is from Poulomi Chatterjee from the Financial Express.
Speaker #1: Thank you. The next question is from Palomi Chatterjee from the Financial.
Speaker #1: Express. Good
Different client situations, which are under.
Speaker #5: Good evening. So I wanted to ask—recently we’ve seen, across Indian IT, there’s been a trend. There’s been a slew of AI-related acquisitions. So, what is your approach with regards to that?
Poulomi Chatterjee: Good evening. So I wanted to ask, recently, we've seen across Indian IT, there's been a trend, there's been a slew of AI-related acquisitions. So what is your approach with regards to that? And also, IT companies are now competitively building, hiring specialized AI talent among freshers who are getting paid significantly more. So what does the talent pool look like, and what are you looking at when you're hiring these set of people?
Some cost containment for that sub vertical within that so we are waiting and we are pushing to make sure that the retail pipeline, which is growing becomes converted into what we drive into the retail growth.
Speaker #5: And also, IT companies are now competitively hiring specialized AI talent among freshers, who are getting paid significantly more. So, what does the talent pool look like, and what are you looking at when you're hiring this set of people?
On my own situation no comment.
All right.
Yeah.
Yeah, No no comment from my side.
Thank you hope you.
The next question is from a weak does from the business standard.
Thank you.
Quick questions, one a little bit more on the BSA commentary, because what we understand that our financial services be FSA overall has been improving in the not in the north American geography, so which sectors or which sub segments within that sector is actually growing if you can just throw some more light studying and north America seems to be grown in a constant currency.
Speaker #2: So in terms of acquisitions, in the landscape, there are not so many AI services companies today that we see. What we do see are companies where we are partnering, which are really AI, whether they build agents or models or foundation tools, which exist, and those are the ones we're partnering.
Salil Parekh: So in terms of acquisitions in the landscape, there are not so many AI services companies today that we see. What we do see are companies where we are partnering, which are really AI, whether they build agents or models or foundation tools, which exist, and those are the ones we are partnering. We will look in an acquisition approach to AI as they start to appear as larger AI services companies. And we have some that we are looking at, which is part of our overall acquisition, meaning there are other things in the acquisition as well. In terms of the compensation, I think Infosys has always been a leader in making sure that we put new constructs in regard to our employees and the new people we recruit.
See pieces any reason was a decline this vehicle was it any sector specific adv deal that pulled it down if you can just throw some more light and the J D.
It seems to be that idea that a new large deals will be smaller or maybe foreign few to come by as more easily do you sort of take the centrifuge keeping that in consideration. How do you think the margins are going to play out across the industry and for you in specific in the long run if you can just thank you.
Speaker #2: We will look in our acquisition approach to AI as they start to appear as larger AI services companies. And we have some that we are looking at, which is part of our overall acquisition, meaning there are other things in the acquisition as well.
Speaker #2: In terms of compensation, I think Infosys has always been a leader in making sure that we put new constructs in regard to our employees and the new people we recruit.
So I'll start off on financial services, we see a good traction across most of the sub verticals, we have within financial services. So we have been seeing good traction with retail banks. We are seeing good traction with what are considered many mid market banks are seeing good traction on payments, we're seeing good traction in the mortgage area.
Speaker #2: What we have now done with the most recent approach and launch is put together an approach for very good software engineers who will work in AI and who will have that level of expertise to be specialized engineers within our structure.
What we have now done with the most recent approach and launch is put together an approach for very good software engineers who will work in AI and who will have that level of expertise to be specialized engineers within our structure and with different and higher or much higher compensation levels. So in the AI world, there will be different types of people working jointly with AI agents with different levels of training. And we want to make sure that we remain in the leading position in that recruitment environment. And with that, what we have launched for specialized engineers, that's the approach we've put in place.
Overall, a pretty strong.
Some are stronger somewhat less strong, but overall, we see a good demand environment. There's good adoption of AI across the spectrum with a large financial services clients and we recently announced a for example, a partnership with cognition, which is very strong and we are working.
Speaker #2: And with different, and higher or much higher, compensation levels. So in the AI world, there will be different types of people working jointly with AI agents, with different levels of training.
With them jointly and some other financial services companies are.
Speaker #2: And we want to make sure that we remain in the leading position in that recruitment environment. And with that, what we have launched for specialized engineers—that's the approach we put in place.
On North America, nothing very specific it's a mix of different industries and different players.
Overall situation.
On energy utilities on financial services remained strong on some of our other verticals remains something that is coming back over time, but not yet.
Speaker #1: Thank you, Palomi. The next question is from Uma Kannan from Deccan Herald.
Operator: Thank you, Poulomi. The next question is from Uma Kannan from Deccan Herald.
Speaker #5: Good evening, gentlemen. So last year you announced the AI-first GCC model, so I want to understand how it is shaping up. And a follow-up question on partnership.
Uma Kannan: Good evening, gentlemen. So last year, you announced AI-first GCC model. So I want to understand how it is shaping up. And a follow-up question on partnership. This month alone, you have announced a couple of partnerships. Going forward, will there be more AI-native collaboration? And one more question. Some of your peers have made it mandatory to stay at the office for six hours. So do you have any plans when it comes to office requirement, office hours requirement, or will you continue the present?
And the third on the Mazda on the large deals you know if you look at the deals that we've signed we have signed $4 $8 billion. This quarter. If you look at even on a nine month basis compared to the larger deals large deal signing they've gone up.
Speaker #5: This month alone, you have announced a couple of partnerships. Going forward, will there be more AI-native collaboration? And one more question. Some of your peers have made it mandatory to...
So while there is always a productivity us that goes up because of AI et cetera that is also you know a lot of deals that are getting structured because of cost optimization cost takeout et cetera from the clients and so a lot of this getting bundled when you look at it and on the margin side you know.
Speaker #5: Stay at the office for six hours. So do you have any plans when it comes to office requirement, office hours requirement, or will you continue the present?
Obviously, it's always have slightly lower margin than the company average, but as a portfolio always make up on the margin because the new work that comes up it comes up at a better margin that says that so that that's a trend that we've seen we're not seeing a change in the trend from that perspective. Thank.
Speaker #2: Regular GCC work that we... Flexible in the way we are today, in the way that our employees are interacting with the company and with our clients.
Salil Parekh: Regular GCC work. Flexible in the way we are today, in the way that our employees are interacting with the company and with our clients.
Thank you. The next question is from Sanjay <unk> from the Hindu business line.
Hi, Hey, good evening, gentlemen, so manufacturing and Yoghurt Ah they have grown significantly for emphasis this quarter both.
Both of these are previously seeing some softness so can you expand on what were some factors contributing to this growth.
And also I think be tech budgets for the calendar year.
'twenty 'twenty six I'd expect it to be annoyed out soon based on client conversations what are you hearing.
Is there any sign of uptick in discretionary spending.
And also the guidance was raised upwards. Despite seasonality then uncertainties.
Speaker #1: Thank you, Padmani. Sorry, thank you, Uma. The next question is from Padmini Dhruvaraj from the New Indian.
Jayesh Sanghrajka: Thank you, Padmini. Sorry, thank you, Uma. The next question is from Padmini Dhruvaraj from the New Indian Express.
Speaker #1: Express. Hi, good
Reasons for this and the last question.
Poulomi Chatterjee: Hi, good evening. Sorry if these questions have been already asked. So one is, going forward, do you see Labor Code having an impact on profit margins? And do you see this having an impact on your appraisals going forward? And the US government plans to cap the credit card interest limit at 10%. So do you see this also having an impact?
Speaker #5: Evening. Sorry if these questions have already been asked. So, one is, going forward, do you see Labor Code having an impact on profit margins?
You know regarding the collaboration with cognition, which is an AI startup.
What are the gaps in your AI portfolio that you were looking to page, but this particular collaboration how is this contributing to your oil E. I Oh, you know momentum just that thank you.
Speaker #5: And do you see this having an impact on your appraisals going forward? And the US government plans to cap their credit card interest limit at 10%.
Speaker #5: So, do you see this also having an
So starting on manufacturing in Europe, I think Europe has been in a good position for us for many quarters and actually even manufacturing that strong activity across the board. We've seen good traction there are pieces within the manufacturing client base of which are benefiting.
Speaker #5: Impact? So let me start with the second.
Jayesh Sanghrajka: So let me start with the second one, labor code.
Speaker #2: One, Labor Code. On the margin impact, Jayesh. Years, the employees would have served for us, et cetera. So that impact is already being taken in the financial statements.
Massively from the AI growth for example, we do work with the companies that provide power solutions, we do work with companies that provide manufacturing into those solutions that provide.
Engine capacity that provide a generating capacity. So there's a lot of those pieces, which are doing well and those are planned industry components, which are doing well.
Our team is really active on that we've also got some good traction within manufacturing on the engineering part of the work and doing so it was part of the world.
Salil Parekh: On the margin impact, Jayesh. Years the employees would have served for us, etc. So that impact has already been taken in the financial statements. There'll also be an ongoing impact because of the wage code, that is. So that is approximately 15 basis points on an annual basis.
The second one related Sip project for 2020 credits discretionary on the discretionary spend overall so first on financial services, we are definitely seeing that what we shared earlier.
Speaker #2: There'll also be an ongoing impact because of the wage code. So that is approximately 15 basis points on an annualized basis.
We are seeing.
Good set of deals whichever happened and then we see that with the AI traction we have in that industry, we will become more the next financial year, we'll have a better.
Better outcomes in this financial year on that in financial services is going well this year.
Generally on energy and utilities, we are seeing a good set of deals that have come together across the whole industry.
Speaker #2: annual basis. Thank
Speaker #1: You, Padmani. Thank you. With that, we come to the end of this press conference. We thank our friends from the media. Thank you, Salil, and thank you, Jayesh.
Jayesh Sanghrajka: Thank you, Padmini. Thank you. With that, we come to the end of this press conference. We thank our friends from media. Thank you, Salil, and thank you, Jayesh. 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 very much, and please join us for Hi-T Outside.
And that is helping us with that momentum. So those are the ones we are seeing on the others.
Speaker #1: 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.
We are not seeing any deterioration to rich's one sign and we see overall the macro environment seems to be where people are expecting maybe some interest rate cuts should we receive that happens, especially in the U S. And then some of the other expansions we're doing for example.
Speaker #1: Thank you very much, and please join us for hi-tea.
Speaker #1: Outside. That has changed, and that will.
We have a program maybe working with some of our smaller sets of our clients and those are growing pretty well. So overall, we feel that as we look out into the next year and these are things that support our growth then on AI itself, we are seeing what I shared earlier.
Salil Parekh: That has changed, and that will be taken as and when.
Areas, where we see potential good growth over the next several years not just in the next year and that will as we start to execute on that that will help us on.
On cockpit.
So let me start on that.
Cognizant of our mission.
Condition. So it's not so much a gas or water. The cognition. Our people are doing is they are built and aging.
Which is working to do software development and we are working with our clients as a partner with them, where we are also doing we are building our agent capacity and.
Enabling those agents to work in our client environments are the advantages.
We have a detailed understanding of how the clan technology landscape is set up and we have a good understanding of what are the industry.
Constrains or opportunities and that combined with the software agent with cognition becomes a very powerful combination and many clients that that's something that will expand quite nicely.
Thank you.
The next question is from Jeff are there from them and what do you make sense.
Just two pronged question in what segments and for what clients will you'll be using these AI software engineers.
And how.
How is this impact delivery, how will this impact billing and more importantly, how will it impact future hiring that is FY 'twenty seven onwards, considering are using a lot of these AI software engineers in to work and client project activity.
So what what we see there first we're heavily be use my senses as they are interacting with our clients and with some of these our partner companies. The usage is going to be across essentially every industry every client overtime.
So it's a function of what is the client landscape and what it is that they want to achieve it.
My sense is they're not.
For example.
In those six that I described earlier, there are places where the economics have changed completely from a client perspective, if you take legacy modernization.
If you use soft regions, plus our expertise plus and knowledge the whole economics from a client perspective becomes much better and that allows a lot of these projects, which were not happening before to start happening. So it is not a case of something which was being done which is now being done differently that will also happen, but this is mark.
Okay, So something which was not being done which will now start to happen. So in that light. We will continue to hire as Josh mentioned earlier, we will announce as we do in April a plan for next year, we are going to hire on campus, we know that and this year we are.
When we've done 18000, we will do 20000 campus Island, we will continue and that sort of as Inge for next year. Because these are new areas of demand and so it's incremental to what we're doing and we will have our people working and these are software engineers, which makes the overall economics with the client much better.
Okay.
Okay.
Billing what was the question.
It will.
The the value that we create will drive the billings a lot of these things will be based on the traditional ways as James was saying of billing and lot overtime will change as the AI market itself develops. So today there is not any immediate change but over time, we'll see that.
Thank you Jeff. The next question is from Parliament strategy from the financial Express.
Good evening, so I wanted to ask like recently, we've seen Oh crossing the 90 theres been a change there's been a slew of like EAA related acquisitions.
What is your approach.
With regards to that and also like I think companies are now competitively building hirings specialized talent among.
Among flashes, we're getting paid significantly more easily.
So what are you what is the talent pool look like and what are you looking at when you're hiring a deep set of people.
So in terms of acquisitions.
In the landscape there are not so many AI services companies today that we see.
What we do see a companies.
Companies, where we're partnering with GE really AI.
Whether they build agents are models of foundation tools, which exist and those are the ones you're partnering we will look in our acquisition approach to AI as they start to appear as larger AI services companies and we have some debt that we are looking at.
Which is part of our overall acquisition, meaning that the other things in the acquisition as well.
In terms of the compensation I think Infosys has always been a leader in making sure that we put a new constructs in regard to our employees and the new people. We recruit what we have now done with the most recent.
Approach and launch is put together.
An approach for very good software engineers will work in AI, and we will have that level of expertise to be specialized engineers within our structure and with different and higher or much higher compensation levels. So in the <unk>.
World There will be different types of people working jointly with AI agents with different levels of training and we want to make sure that we remain in a leading position in that recruitment environment and with that what we have launched for specialized engineers that that's the approach we've put in place.
Thank you Paul and me. The next question is from Omar Cannon from Deccan Herald.
Good evening gentlemen, two lost deal you announced a first D. C Z model till I won't I understand how it is shaping up.
And a follow up question on partnership this month alone we have announced a couple of partnerships windfall will there be more <unk> collaboration.
And one more question some of your peers have made it mandatory to see ideal phase six shots. So do you have any plans when it comes to office requirement of disaster require mental view continued patient hybrid model.
So on the C C b.
As you mentioned launched the AI specific approach, we have a lot of client activity that we have some clients. We are already working on that there are several others, which are in the pipeline for large.
AI specific capability building in D C six and beyond.
GCC work that we're doing and that's going pretty well at this stage.
In terms of partnerships, we will have a number of different partnership because there are several.
Companies smaller companies, but with great capability on AI on the foundation model on coding on agent development on customer service. So we will continue with that because those are the areas, which our clients are most interested in and we will continue we are already working with those companies.
But we will have these sort of strategic announcements as well.
And the third one booked from a virtual world No. We are not making any change to our approach will remain flexible in the way we are today.
Our employees are interacting with the company and with our clients.
Thank you Bob.
Thank you Omar. The next question is from per minute Rollouts from the New Indian Express Hi, Good evening, sorry, if these questions have been already asked.
So one is going forward do you see the record having any impact on profit margins and do you see this having any impact on yard are pieces going forward.
The U S government plans to cap their credit card limits in this limit interest. So do you see this little isn't having an impact.
So let me start with the second one labor Court judgment of engine I can also mention on the appraisal.
On the U S credit card, what you mentioned.
That is something that the U S banking system will look at and how they have to implement it.
What we do with our clients with the large banks is help them as they have to go through different regulatory changes and if that requires a help and support we will continue to do that.
On the.
Margin impact as will mentioned the number on the appraisals there'll be no change in our appraisal approach.
Yes, so on the labor code.
Whatever is the impact.
Got it in December and has already taken enough financial statement. That's a one time impact because the regulation has changed and there is a cause of impact for the number of years. The employees would have served for us etcetera. So that impact has already been taken in the financial statements. There'll also be an ongoing impact because of the way toward that has changed and that that will be taken as and when.
We go through that is approximately 15 basis points on an annual basis.
Thank you Bob.
Thank you with that we come to the end of this press conference. We thank our friends from media. Thank you sell them and thank you Josh before we conclude please note that the archived webcast of this press conference will be available on the emphasis website and on our Youtube channel later today. Thank.
Thank you very much and please join us for high to outside.
