Q2 21/22

Oct 25, 2021

Good day, and welcome to Tata Alexey Q2 FY 'twenty two Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, And there will be an opportunity for you to ask questions after the presentation concludes. Please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now now hand the conference over to Mr. Lokesh Parekh from Christensen Advisory. Franklin, over to you. Thank you, Good afternoon to all the participants on this call. Before we proceed to the call, let me remind you that the discussion will contain forward looking statements Let me involve no more unknown risks, uncertainties and other factors. It must be nearing convention with our businesses This could cause further results performance and achievements to differ significantly from what is expressed or implied by such other business statements. To take us through the results and answer your questions today, we are the senior management of Tata Alexey, represented by Mr. Manish Raghams, MD and CEO Mr. Nikampay, Chief Marketing and Chief Strategy of MD and CEO Mr. Nathan Pyle, Chief Marketing and Chief Strategy Officer Mr. Doro Badrias, Chief Financial Officer Hi, Mr. G. Vadimathan, Chief Investor Relations Officer. We will start the call with a brief overview of the past quarter by Mr. Daghman Hello, by FQMFG. We would appreciate your cooperation in just taking your child's questions I now turn over the call to Mr. Bennett Shakhran. Good afternoon, sir. Good afternoon, thanks, Lokesh, good afternoon everybody. Thank you for joining us today and both you and your family were safe. I'm happy to report that we have delivered another quarter of steady growth across industry verticals and we continue to exist strongly on both Top 9 and Bottom 9. Our earnings from operations for the quarter gone by was to be RMB595.3 crores, We have seen a growth of 6.6% quarter on quarter and 38.4% year on year. The growth was entirely volume led, with Reflecting in a constant currency revenue growth of 7.4% quarter on quarter and 37.2% year on year. We had Forex losses to extend the 4.74, while we had an almost 18 gain in the last quarter. We will continue to monitor our hedging policy and tweak as required. The real focus is on driving operating performance while managing downspaces in currency. Our profit before tax grew 11.1 percent quarter on quarter and 55.5 percent year on year to INR121 crores. Net profit for the quarter stood at INR125.3 crores, reporting a growth of 10.5% quarter on quarter and 50 8.9% year on year. The company's growth was powered by the embedded product design, CPD, our largest division, a 10.6% quarter on quarter and 34.4% year on year in constant currency terms. Within EPD, the growth was broad based across verticals. The transportation vertical business posted a smart double digit quarter on quarter growth of 12.9% and 29% year on year. Media and Communication and Healthcare verticals delivered another steady quarter. Media and Communications grew by 9.8% quarter on quarter and 32.9% year on year growth and Healthcare grew by 6.6% quarter on quarter and slightly 2.3% year on year. We have seen significant growth in automotive market with large and strategic deals with both the relevant suppliers in EV and autonomous technologies, underscoring our technology and engineering leadership. Tata Alexey won a multimillion US dollar electric rated software development event for a new age EV OEM for the APAC policy. We also won a software platform development deal for Laboratory, Autonomy and Beyond from an automation system supplier. Rest of the world, it is really Japan, Korea and China for us, has been muted for some quarters, especially because it is automotive ready And travel restrictions also banned the start of new projects in the region. We are seeing from Dwyerland here, we also won an EV system software development deal from a leading patented tier and supplier which will ramp up from this quarter. Our Media and Communications business continues growth degree led by organic growth and deeper mining in our top customers and platform led teams integration for a multi region Android TV launch for a leading Amrita based operator and this will be a multi year engagement. Our award winning ITX platform for customer experience was chosen by a leading global telecom operator to be adopted and deployed across multiple countries. We will see new countries signing on over the next few quarters. Our industrial design business declined 30% The sequential decline was due to a shift in program timelines for a large ongoing design led Generating project with a U. S. Customer who also insured in the Hawkeye customer list. We have finished one phase of this large project for subsequent phases as before, And we expect this to resume in the next 1 to 2 quarters, but the value will be spread over a few quarters. In the meanwhile, IDG is creating traction through design led deals, which are a multiplier asset for the 3 verticals and has won significant targets for itself. On a sample of the deal we announced this quarter where we have selected as a strategic design agency to redesign an entire portfolio of appliance for a leading agent appliance company. IDD Group margin of 64.5 percent on a year on year basis and continue to baseline at a much higher number than the same quarter in the previous year. This is a better sign of long term trend of sustained revenues, while some growth is still subject to volatility quarter on quarter and the news that it Overall, we are also focused on deeper mining of our customers beyond the top 10. We believe there are great logos in our customer base that can deliver growth. We are also carefully adding customers to reach verticals that can drive future growth for us. We added over 500 new employees to the Alexey family in the quarter. While attrition increased to 13.9% for the quarter, We are still lower than industry averages and continue to actively work on retention especially for key employees, We'll continue to plan and add new employees to drive future growth. In summary, this is a very satisfying quarter with superior top line and bottom line performance as supported by industry leading operational excellence and talent retention. And we have entered the Q3 with a strong order book and a healthy deal pipeline across the markets and industries. With that, I hand it over to the Q and A session. Thank you for your time. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Participants are requested to use handsets while asking your question. The first question is from the line of Vimal Gohen from Unai Asset Management. Please go ahead. Thank you for the opportunity, sir. Congratulations on a good quarter. So my first question is if you could just want to ask the last quarter you had We had a one time large bonus payout. And this time around, I guess, there would be selling hikes that could have got executed. So can you just highlight what was the impact of the satellite on margins in this particular quarter? And my second question was related to the transportation verticals. We've seen a very, very good sequential effort in transportation. If you just take us through What is the output there in one of your largest clients over there, which is How is it doing? Would you say that it is at its probably at its closer to all time high as well along with the client? And we expect medical devices also, we are expecting more than 10% to 10%. So are we on track to that? For now answering questions. Yes. Thank you. So there are multiple questions there. So yes, we had a full salary hike in this quarter starting from July. So these the salary hikes were up a range of about 40% to 50% Right. So that's the product salary budget, the high profits that were incurred in the quarter. We have talked about Automotive business has been subdued for Many quarters and the last quarter and this quarter we saw some decent growth. We've got a definitely double digit growth. So a lot of good Gretchen in the marketplace in both OEMs and Tier 1s. Our dealer business definitely has also grown, so this is very satisfying. But again, we are more like close to the peak we had and I think the peak we had was sometime in 2017, 2018 timeframe. So we are much similar as this, but there is a long way to go. And we strongly believe that as We will now see that into full EV part of OEM and manufacturer. There are a lot of opportunities that will open up for us and Hopefully, please go ahead. We should be able to cross the peaks that we achieved in 20 19, 2018 times. The medical business continued to grow and as we have seen from a year on year basis we have grown significantly And we continue to focus our investment and focus our sales force in that business. And we hope we will grow that business quarter on Tata as we have here in this business. I'm looking same as the engineering model for OEM don't really get We have been impacted because of any temporary slowdown in their volumes. Now does that take it or does that go through other engineering budgets or let's say, outsourcing productivity for OEMs and other large opportunities. We have sort of recovery from their volume perspective. And this trend has been sort of accentuated in recent times. Would that be a fair announcement to look? Yes, I think the industry is struggling with the semiconductor shortage and so on, right, but that's not a temporary good quarter, mid quarter quarter situation. But Long term outsourcing, long term projects and so on, we don't see any effects of the temporary situation on any of that. And We are pretty confident that unless this continues for the next 5th to 8 quarters and We don't see effect of this on our business. Thank you. The next question is from the line of Bharat Seth from Quest Investments. Please go ahead. Hi, good afternoon, Raghavan and Nikin and congratulation on good set of numbers. Yes, I'm trying to get some sense from medium term perspective. If we really look at, I mean, Until Q3 of FY 'twenty one and full FY 'twenty, we hired almost same 756 employees, whereas in last three quarters, we have hired almost 1800, which is almost more than double. So how do we really seeing this medium term? And Second thing on this attrition. So attrition, have we seen on medium and higher end or At lower end, so in this lower the net addition, whatever we have done, so how do we see the overall employee cost as their sales. Yes, if you look at the overall employee cost, I think we have been able to manage Pretty well, if you look at it, 55% of our revenue is the entire cost, right. So Yes, you're right. We have We have seen accelerated hiring in the last few quarters. That will continue in the subsequent quarters also because we are Our utilization has gone up significantly. In the earlier Tata, the growth came. I mean, we had resources and we were planning for it, but Today at which we have been growing, we definitely need to add more resources both license, license threshold. So whatever we have seen the last couple of quarters that we have been adding, I think this quarter we have added over 1200 engineers and Last quarter we added about 1,000 engineers gross. So and we hope to continue this in the next few quarters as well. So what we are doing is we are planning for this growth that we are seeing right now, right? And for us, if you look at it, I'll say there is huge demand in the marketplace and we are very hot and we are getting ready to meet the demand And that is why you see this accelerated pace of hiring. So I mean last year despite I mean we grew 13%, but Since the change in onshoreoffshore mix, we grew more than 40% if we're really like to like basis anyone Offshoring is increasing. So how do we see the margin trending from here onwards? I think we will take it from a hedge fund perspective. We are at about 2.5 percent, 27.5 percent in the hedge fund I think that's a good balance margin. It gives us It gives us a cushion even if we need to go out and hire experienced people and so on. It gives us a good cushion to be able to manage it without really who is now bringing down margins significantly. And the fact that we have been able to move more work offshore also gives us this cushion. So yes, we are sitting on a good cushion as far as margin perspective is concerned. So that gives us a good confidence that If it's while our investments are needed to grow business, we can confidently go ahead and do that without really affecting the margin This kind of growth, I mean, and with the return of the employees that we have won almost 40%. So this kind of growth do you think is sustainable for at least a few years, the time of our pipeline? And second thing is on that, In our commentary, you are saying that we have won a very good business on the product and platform basis, digital platform. So how we are seeing the platform, percent increasing? Yes. So, yes, we need to add our headcount Just keep in mind as part of the demand that we're seeing in the market, right? As far as the platform is concerned, yes, we've been building a number of platforms including Talta, I see a question. The number of things that we are building, especially in the media and communication verticals. And that has really helped us to win Customers and operators that are otherwise difficult to really you need to bring something of value to them that they will engage with you. And so our strategy of building these platforms has been pretty useful and we have shown some good customer wins including this quarter where we have really licensed our platform and built solutions around it to win Communication in the customer to others know would be very difficult to engage. So we basically would continue building this platform, Building these interesting projects that and by first, the licensing revenue from those will not be very significant, But what it really helped us is, it helped us to get engaged and then build our services revenue around that platform And it's also there is a very strong value proposition, it's essentially passing from competition I'm also very reluctant with the customers. I see there are many, many reasons why we would complete investment with my friends. Thank you. And on the best I have more questions, I'll rejoin the queue. Thank you. The next question is from the line of Navin Botha, an investor. Please go ahead. Congratulations on continued operating excellence Bharat has already asked about the management based system of employees and the platform that is. So I would like to I won't like to repeat that. If you can throw more light on our inaugurate acquisition and further capital allocation towards the organic R and D and innovation led investments inorganic acquisitions, if you can throw out some more blue light on that. And relating to that, if you can provide us the data, Yes, I know the IPR I'll answer the second question. IPR is definitely below 5%, somewhat standalone basis, right? IPL led revenues, we can see our services around IPL that is showing a good traction and that is what we are depending on. On an inorganic study, I always repeated that we're not shying away from an inorganic activity And the situation is the same. There is nothing to report as of now. As of now, as of now, there is something for investors, please let me know. Okay. And second question regarding the introduction of new verticals, the agitites and All the training and all that because in the social media, we have seen some thoughts and all these things about the And all these things, is it going to say that just like help in the going forward, we will be introducing new verticals to standalone verticals. Could you not focus like you did write on all this? Yes, we are continuing to invest in EdTech business. So it is still a very, very small business that is a definite focus. Similarly on independent product or manufacturing the company to invest, So these are 2 new areas that we're not calling it out as the first rate industry verticals in turn, but We continue to invest in that and we have early customers in both of those places. However, an appropriate time even made out to the Okay. And just a small question regarding the hiring target for the next 2 quarters, Yes. I guess We should be able to our hiring would be in the range of again in the 1200 to 2500 a quarter for the next 2 quarters. Okay. So that end of the year on year on 10,000 net additions. Yes, Thank you. Thank you. The next question is from the line of Saravanan Balakrishnan, an individual investor. Please go ahead. Yes. Thank you so much for giving the opportunity. I just have a couple of questions. The first question, finally on the client concentration on the slide. So earlier top 5 clients were used to contribute somewhere around 35% to 30%. So how That's how that is changing. And second question is primarily on the ER and basically, where are now since the global OEM stream has changed. So what's the trend looking like? So what it feels, so across all year end companies, so we show similar growth rates. We mean that we 3, 5 years. And if for any reason the trend reverses, like how are we like since we are adding 1500 and employees in the quarter. So how is this product portfolio mix getting balanced in terms of any macro impact? Yes. So, Tata's 5 customers concentration is 30 basis points is almost 30 9 percent. And what we have been particularly looking at is to vertically mine the top 10 accounts As well as get beyond the top 10 customers and also aggressively grow the top 10 digital There is an active effort going to really look at the top 20 target and see how you can grow that particular customer base. Regarding the ER and D question, it's well known that there is going to be a room in the ER and D, all Data and trends indicate the same. The entire good start in the You have any faith including AI, big data, The trend towards digital manufacturing, all of that would definitely mean a lot more growth for companies like us. Because the media and communication with OTC, with digital ad, all of that's coming in, So So I think when we look at all that there is something happening, I'm sure we will be able to create much before a lot of our lives and we will take I would say very much cover from an industry risk perspective. Unless having drastic happens in the world, I think next 2 to 3 years, we don't see currently the RPI at the around industry segment going down and Good evening, everyone. Good morning. And one last question we have is regarding the M and A projects. So almost all the ER and B companies are also in getting good acquisition targets, primarily from a marketing standpoint. Yes. So we are not looking to acquire any company It's a critical, right? What we're looking at is in the we're very focused on activities that we are in and we're trying to identify companies that can The company are overvalued at this time in time. So unless something comes up that really meets the criteria, we will have Got it. Got it. I think that sounds for acting Pharmaceutical. Thank you so much. Thank you. Thank you. Next question is from the line of Amit Sawhney, an individual investor. Please go ahead. Hello? Yes. Hi, Varun. Thank you for taking my call. I just want to confirm that is JLR our largest client this quarter? No, Yamar is not the largest time for a few quarters. Okay. And the other point is that The Q2 increase in the employee cost is huge growth. So and our number of employees have also gone up. So I'll just it was just not adding up. No, there is a number of so I think there's one clarification here. I try to remember that we did have a onetime bonus last quarter, right? So that came in last quarter, but does not have much of an effect in the quarter of this plan by. I'm talking about Q1 versus Q2. Q2 really pleased to build ticket items. 1 is Saudi Heights that are deployed with existing employees and on the additions of the data of new employees. Understood. Thank you. Thank you for your time. Thank you. The next question is from the line of Chetan Saraf from TASK Investments. Please go ahead. Yes. Hi, thank you for taking my question. As we found the M and A, right, so Mr. Raghavan mentioned on the geography as well as the One question and related to that is with given the market scenario and trends, Thanks, Shitesh. This is Nitin Jodh, and maybe I'll take that question. I think the natural path and the preferred head for us for entering new areas, building capacity over its capability is organic. So to our attention, we are very clear. Anything that can be done by us and can be done in a given time period with a reasonable chance of success and Customer acquisition is preferred, right? And if you look at M and A, it is really when we believe that When we do our NPV calculation that the path of organic is not as efficient as M and A, right? And therefore, The value that we're acquiring at, the risk of integration then balanced out against what we say, that's equal to us is, and really what rate progressed. To that extent, we are not waiting for M and A to deliver fast, right? So I think monastic refer to certain integrations of There are new practices, some new technology capabilities as well as some new verticals. All of these are being done organically, But what we're doing is examining inorganic options to activate our channel. And this is true for adjacencies. When we talk about adjacencies, I mean, we have called out Rail and off rail, off highway vehicles. We called out OTT and New Media in the context of medium communications. We called out pharma and digital health. So all these are declared at SMEs and these are some things that we are working already organically on. And we are building and accelerating our revenue there, right? So when M and A comes in, it's only to create a shortcut or a shorter path to scale only if it makes sense for itself. Thank you so much, Hassan. Thank you. Thank you. The next question is from the line of Manish Malkani, an individual investor. Please go ahead. Yes. Hi, good afternoon. We have already seen rumors of Tata Alexey mostly with TCS. So every now and then, this news keeps coming in. So What are the possibilities of that happening in the near future, Kirei? And considering the for the investors, the prices right now So any chances of a stock spread of what has been in the future? Yes. So this question keeps getting asked every now and then, right? And this is not only now, right? So, Yes, if it happens, it will happen. But right now, I don't think there is any indication whatsoever, right, on this Tata. Dennis, I think, yes, it is decided in our CECO board meeting Mr. Malkari, do you have any further questions? Thank you so much. Thank you. Thank you. The next question is from the line of Kieran Burke from Alchemy Capital. Please go ahead. Yes. Hi, Rajuwan and Tim. I have no questions actually. I just came on the call to congratulate Thank you very much. Thank you. Thank you. All right. Thank you. Cheers. Thank you. The next question is from the line of Apurva Prasal from Alara Capital. I have a question on the client bucket. So it just seems like top 22sari had a close to double digit sequential decline. So is that comparable to the previous quarter, the top Sorry or has that changed? Because it looks like a double digit Q1Q decline. So that is one question. The other is If I can get the utilization numbers for the quarter. And finally, on the impact, is there going to be another one time add on impact in the Q3. Sure. So the top side, there is no change. It is just that in the order of sequence there is a claim, but otherwise it's offline to the same. There is no claim. And again, that's as we've already called it out, it is a specific customer in the industrial design A business that we are executing a large project, a development project which concluded and the follow on project It was supposed to happen immediately, got delayed. So that's the only reason. So we don't see any Thanks, Tawse. Moving forward also. Of course, we will this particular client investment continues, But the ramp up will happen now over a few quarters to that extent when we found a muted growth there. So that's the question. Yes, no, I think that is it. So just a note there, as well, that excludes fresh campus hires. We've been through campus hires at about 5%, but Got it. And Is there a follow on impact of the wage bonus that comes in Q3 or is that all done in the Q1? The one time which happened in the Q4, was that also still over to Q3 or was that also part of Q2? No, it is also Tata. We will move on to Q3. Yes, it was finally Q1 with a little bit spread to Q2 and that's it. That's kind of it. Got it. Thank you so much. Thank you. The next question is from the line of Dhruv Shah from Undercover and Co. Please go ahead. Yes. Hi. Thank you for the opportunity and congratulations on a really good set of numbers. So I really want to know what's So what's the outlook on our on-site and offshore mix? Because every quarter you surprise us positively with mix. But do you see it going above this or with work from home closely ending, we should go back to 65% to 70% range? On-site, literally speaking, is lesser effort, right, for the same You know, hard work, you put in again the double revenue. If you sort of imagine this growth, we are primarily pushing this growth through offshore revenue and which means we are It was probably hard to get this revenue growth. So unlike other companies in Poonan, this growth comes from purely project lead offshore engagement. And if you look at from a headcount perspective, so that's also another reason why we are aggressively adding headcount, right, because We are growing offshore project execution and offshore revenue. Having said that, the Q3, some economies are slowly starting to open up flow. So we could see a little bit of onset activity, you know, ticking back, but I don't see Too much of the effects have lapsed in Q3, but we would closely watch Q4 and the mid Q1 to see How the situation trend is spread. At this point of time, I think we would be trending within 95, 96 I was I wanted to pick your head on one point you made that Japan, Korea and China are coming back. So maybe 3, 4 years, what would be it as a percentage of Could you share these 3 countries together? 3, 4 years down the line. No, before, like 3 to 4 years back, what would we dare share of the transportation vertical? Vijay, I can take that if you're looking there. That's roughly about 20% or so. But you have to know something that at that time it was mainly Japan only While China and Korea were just starting to build up their geographies, right? And over a period of time, we've added China and Korea, we've We have had a lot more customers in addition of customers in these divisions, but on the other hand, Japan has always been muted for some years now. Okay. Thank you and all the best. Thank you. Thank you. The next question is from the line of Ravi Naredi from Naredi Investments. Sir. Congratulations to Mr. Namod Darband and all his team. So When everyone is setting our attention, but you have done wonderful, Joe. Sir, some investor had asked to split the share and bonus. Please never do that for investor benefit Because due to this, so many fiscal investors in the company and whenever the market goes down, they send their territory impacted from the government. So our big question is, more warm ups, more big deal. Thank you. The next question is from the line of Harshav Surana from Niam. Please go ahead. Hi. Can you So are you seeing the structural shift in working for employees working from home or are we planning to bring them on board on this working for market change on a face to face manner, should be a decision on any question. Yes, right now Maybe 6%, 7% of the employees work from office, but majority of our employees are working from home. However, over the next Next few months, we are gradually bringing back on the senior people, the leadership team and so on back to office. And of course, Tata customer engagement that is more efficient if they all work together because of lack of activities and so on. So some of those we will bring people back to office. But in general from January onwards we see a move towards This hybrid working customer, a few days in a week On the excellent basis, people will come to us when other agents will compound. So I think the way it's our It's mainly a hybrid product announcement and we are exploring various ways of making this more effective as we speak. Okay, got it. Thank you. Thank you so much and all the best. Thank you. Thank you. The next question is from the line of Tushar Bora from MK Ventures. Please go ahead. Yes. Thanks for the opportunity Sir, you had few quarters back, you mentioned in one of the calls to a question of mine that you have stated intention of So it's 10% quarter growth trended, 10% revenue from IP. And also looking at shifting more Long term engagement. If I could just understand where we are in that journey today So very clearly on the long term projects and investments Gladys, welcome to the rest and the part of growth that we are seeing over the last 8 quarters is the primary indication of The product client mining that is happening and the product long term deals that they are winning, right? So all the policies within our region from an incentive policy, Phase 4, incentive policy, etcetera, It's really focused on rewarding long term deals and so on. So I think From an IP perspective, I think we are still below 5%, but what points to note that I told you is that We are pretty hopeful that because what we see instead of a standalone IP and revenues attached back alone, The kind of add on revenues that we get by licensing our IP and building the services around those IP, that is what we are leveraging and that is So, you had in one of the earlier calls So, Sante, the management intention to see a double digit quarter on quarter kind of a growth from this. I think you mentioned quarter and quarter. No, I think the bigger point is that the kind of growth we are seeing right now, Is there something you think that can be sustained for a few quarters? Do you think that this is a more strategic shift to integrate your own Good morning, Mr. Vicky. Yes, so we are So that's the product focus that we have as the management team and as an ongoing issue. We're putting in Anything, right, including investments, hiring, focus on customers, video mining, Tata and Optical and Company. All of that focus has been to really put continue to grow at this rate, right. So So that's what the intent is and that's the perfect that we don't know what the future looks like and what the enemy will face. But whatever come, whatever, can we ensure that we will be able to Thank you. The next question is from the line of Bharatje from CoorsT Investments. Please go ahead. Hi. Thanks for the opportunity. On this designing led growth, which we were harping a big, of course, it's an initial stage. So When do we really think that this designing business will give us a sustainable growth every quarter on quarter or Yes. How can we discuss our relation with the client and within the business on that like what we are doing on the I appreciate. Absolutely. So, this environment is critical that it's a entry strategy for us to be able to mine Yes, compared to last year, the industrial development is almost sort of at the same 80% higher than Last year, I was wondering. That is going to give you a good indicator of the sort of changes that we have made To enable this sort of a growth, yes, design led deals and industrial design Customers, not always do we have multi year deals and that is still a working progress, I would say. We have a great team, great potential. It is just that we need to be a lot more consistent And I think it will take another 3 to 4 quarters to get there. But I'm saying that even at this rate, I mean, today is happy and But we are in a good shape as compared to last year. And this is Really related more with media business or health care? It cuts across media, health care, automotive, Industry, manufacturing, education, it cuts across multiple industries. Okay. And second thing, since we have We are the law of Kemper Tyres. So how much time really it makes take us for to deploy the same Usually, it takes about 9 months to 12 months And then we've got the statement we have rigorous training programs and so on. But this time what we have done is we have moved everything into online learning and In fact, with many colleges, we've also had higher parents even before a new year joined, we really make them ready. So Right now, we're hoping it will crunch the timeline to begin 3 to 6 months. But we really need to see how that works out. Okay. Last question, if with your permission. I mean, earlier in ERD business, clients were insisting more of on-site, but Since the COVID has provided us the opportunity and we have been able to through successfully that offshore also can do, which can help, I mean, Saving in the cost to the client also. So even if things open up and So how do we once look at M and A's onshoreoffshore mix going on medium term perspective? If you look on that, I will say medium term, we should be anywhere between the 65% to 90% top 4 and remaining on-site. We I doubt that you will go back to our earlier 50% on-site 50% of the right growth ratios. We may not go back to those ratios. Okay, And so typically it will look little lower. I mean initial quarter growth terms will be lower, correct? Yes. Okay. Thank you very much. Thank you. The next question is from the line of Mohair Mutani, an investor. Please go ahead. Yes. Good afternoon, sir. Thank you for taking my question. In our earlier calls, We mentioned that there is order with visibility for our kind of company for next 6 to 9 months. Now that you are talking that you are confident customers for the next 2, 2, 3 years, so what has made you change your mind or What has changed in the industry that makes us confident for growth for the next 2 to 3 years? And The second question is that how is the rail segment picking up within the transport vertical and what kind of opportunity do we see for that segment and how much it can contribute to the Transport segment maybe within the next 3 to 4 years? Yes. So all of this visibility, as I said, it is very dynamic. All of this visibility is one thing that is Overall growth in industry, right? When I say growth in industry, growth expectation, right? I'm not saying that next 2 to 3 years, 100% we'll grow. What we're talking about from order book visibility is for 6 to 9 months, right? So that continues, that visibility is there. All indications, all whatever you read, the trends that you see in the marketplace, whether it is on the EV side, whether it's on the OTT side, on the counter health care side. All you talk about customers, you talk about the overall industry. The ER and B trend, whatever you read indicates that this cycle will continue for the next 2 to 3 years. And that is the confidence that I will talk about. It's not that we Alexey. Rail segment, yes, rail segment continues to grow for us. We won some big deals given in this quarter. From a midterm to 3 to from 5 year perspective, I would say, We would expect rail and off road, like that segment to contribute about 20% to our transportation movements. Right, sir. Thank you. Thank you. The next question is from the line of Navin Botha, an investor. Please go ahead. Thank you for giving the opportunity, Anshaven. My question is regarding the taking from the last call, our aspirational $1,000,000 target, if you can Enlighten has thought about this. Is it the right time or it would take a little bit more time to articulate that $1,000,000,000 by 2 00.06. No, we've never talked about anything about Mr. Godhra. So You talked about having some internal goals in Peron, but we have never talked about it through external investors, right? So We're not in a position to talk about something about which we are not ready to talk about. In the last call, we had the discussion that we are in the process. Right now, we are in the process of No, what I told you very clearly is there are internal No, what I told you very clearly is there are internal joints and we're working on those internal joints, but that is not for the external world. Okay. Okay, sir. Thank you very much. Thank you. Ladies and gentlemen, we take the last question from the line of Rohan Advan from Multi Ad. Please go ahead. Yes. Thanks for the question. So my question in the December onshore offshore mix, It is 75, 25 now. Now say in FY 'twenty three or 'twenty four, we go back to 65, 20, 35. What does it mean for revenue growth and margins? Because in customer, we do smaller because otherwise they have to create a lot more What happens when we move on the other direction, which is 65, 35? What happens today is the Indian growth that we had Yes. So this is Nitin here, and maybe I'll take that I would put it very simply, right, these are all scenarios. Now what is desirable is different from what scenarios may play out. I think what is desirable for us is very clear. We would like to demonstrate offshore delivery because that is where both scale and capability has been at play. So when we bring our people on-site, So we are very clear that from a strategy perspective, offshore is far more difficult to launch. It's not really for margin alone. It is simply for the value delivery side. Now having said that, how does the market trend slightly different? Because there may be some customers who have entered have a slightly greater preference for and what is Zizari? We are very clear. We would like to promote and accelerate offshore Delhi because we believe that not only margin accretive, but more importantly, strategically differentiates us from NBRs in the market Because of our ability to tell us. Thanks. So I'll just make the point that 65, 45 is not a dilapidated And nor is it that we expected to go all the way there in a hurry. We expect to pivot very slowly and That is where a large part of our focus will be, how do you make sure you continue to develop an asset? Thanks for taking my question and all. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments. On behalf of Manoj and the management team at Alexey, I would like to thank all our investors for taking the time to silence today for the call. We had a good quarter. We hope to Thank you, Brian, and we look forward to connecting with you again at the end of the quarter. Happy festive season, John. Good bye. Thank you. Bye bye. Thank you very much. Ladies and gentlemen, on behalf of Tata Alexey, That concludes this conference. We thank you all for joining us and even now disconnect your lines.