Q2 20/21

Oct 15, 2020

Ladies and gentlemen, good day, and welcome to the Tata Electricity Q2 FY 'twenty one Earnings Conference Call. A reminder, all participant lines will be in the listen only mode, there will be an opportunity for you to ask questions after the presentation concludes. Please note this conference is being recorded. Also, we'd like to inform participants that this call is for approximately sixty minutes and will end by 03:55PM Indian Standard Time. I now hand the conference over to mister Vedunathan. Thank you, and over to you, sir. Thank you. Good afternoon. I welcome all of you for the to the h one q q two FY twenty one earnings call. We have Eeyore with us, mister Manoj Raghavan, CEO and MD and Nitin Pike, CMO and CFO. The agenda goes like this. Manoj will give a brief of the results of q two, and thereafter, you can pose your queries and restrict one query per person participant so that we can give chance to others. Now I'll over to Manodaran to take it over. Thank you, Jeevee. Good afternoon to good afternoon, everybody. Thank you for joining us today, and I hope you and your families are safe. So I'm happy to report that, you know, we have delivered a very robust due to the 05/21. And I'm sure you've seen the metrics that was published. It was really an all round performance, you know, both top line, bottom line, growth in both our key divisions, the EPD, and the product design division, and the industrial design and the service division. Also, broad based growth across, you know, all the industry verticals and geographies. So I think it is a very, very satisfying, you know, performance. Our revenues from operations grew by 7.4 quarter on quarter and 11.5% year on year. And another report that we need to disclose constant currency growth. So this this actually translates to constant currency growth of 6.9% quarter on quarter and 4.4% year on year. So as you as you can see, you know, most of this quarter on quarter growth has been, you know, volume led, you know, more than 93% of the sequential growth in the quarter one by was in a volume line. So all this data has been published in our fact sheet that is being put up on our website, on our Investor Relation update. As far as profitability growth, we grew our GDP by about 17% quarter on quarter and 56.1% year on year. Again, a pretty satisfying, you know, growth as far as bottom line is concerned. The company's growth was driven by primarily by both these key businesses that is VPD and IDV. EPD, which is the largest com company's largest division, grew by 7.1% quarter on quarter and about 15.1% year on year. IDV also posted some growth of 15.1% quarter on quarter. You know, this is, you know, pretty good, you know, design, you know, project wins and so on. Within the EPD business, medical and health care continues to grow fast faster than the rest of the verticals. This quarter, we we grew at 14.1% quarter on quarter. Media and communication delivered another quarter of steady growth at 6.9% quarter on quarter. What is also satisfying is the transportation vertical showed a marked growth of 5.6% quarter on quarter. So definitely, we are seeing recovery in automotive market. And, of course, as we have already seen, we have closed some good deals, including a multiyear deal with an European given supplier for vehicle electronics and software. We've also added a new automotive OEM, you know, as a customer. So in essence, you know, we want to say that we're back to our, you know, pre COVID momentum as far as growth rates are concerned and we expect this momentum to continue into H2 this financial year. As we enter into the second half of the financial year, we're pretty confident with strong deal pipelines across year end verticals. A good number of, you know, you know, deal momentum, large deals that we are pursuing. And, you know, because of the performance that we have been able to generate, we are announcing salary hikes for our employees to take from October 1. So with that, I would want to hand it over to Jeev for a Q and A session. Thank you and look forward to your questions. You very much. We will now begin the question and answer session. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset for asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Kevalasher. It's an individual investor. Please go ahead. Hi, sir. Congratulations for the great set of numbers. The question which we want to ask is, are the margins sustainable and can it grow forward in times ahead? Yeah. I mean, you know, our our our focus is to ensure that we maintain our margins, and I will just announce we are you know, we we would be giving a salary high also. So but having said that, we would continue to guide in 22%, 24% PBT, and we would hope to be at the upper end of that total. Sure, sir. Thank you. Thank you. The next question is from Kunal Shah from ITM Mutual Fund. Please go ahead. Thank you for the opportunity, and congratulations for a good set of numbers. Please take the Can you please allow the seats? Yeah. Sure. Is it audible now, sir? Yeah. Very much. Yes. So congratulations in the first place for a good set of numbers, sir. Just continuing the question on the margins front, right, you did guide about 22 to 24% PBT. I just wanted to understand three, four aspects. I mean, how should one look at the other expenses going ahead because there will be a lot of discretionary expenditure, I believe, which would have been curtailed. And also, our on-site offshore mix, right, has tilted very much in the favor of offshore from 57.4% odd to 65.3% in the recent quarter. So how should this shape up going ahead having effect on our, employee cost and other expenses? Any thoughts? Yeah. No. The onset after ratio is working towards the after is is is what everyone dreams of. Right? So I think that's in the right direction. If it's confusing and if we can move more work from on-site to offshore, our margins will only improve. So that is positive. Other expenses, see, even as we speak, 95% of our employees are working from home. So so literally, a lot of other expenses are not there. Right? So the future expenses, you know, employee celebrations, travel, you know. So a number of those expenses, I I think at least for the one quarter, so we see opening up of opening up of the travel and so on, will continue to be muted. So I I can't predict, when things will get back to normal, but, based on what people say, it looks like, I mean, next financial year, we'll we'll get back to normal. Okay. Okay. Okay. So you and how about the on-site offer, sir? Should we see this remaining same at least for the one quarter and then see how it goes. Right? Yeah. Definitely. I think at least for the next quarter or even maybe for the next two quarters. Again, it all depends on how come countries and, you know, open up and travel restrictions are removed. You know, you have all those reinfections coming in and more western countries are now more and more cautious and torn. Right? So take your name at least for one quarter, these ratios will continue, maybe for two quarters. Okay. Okay. And you did talk about the hike through first October for the employees. So, I mean, any quantification you would say how this would pan out in the employee expenses? We are looking at, you know, within 68%. So final details is being worked out right now. Great, sir. Great, sir. And just moving on the deal pipelines, the commentary was pretty optimistic. So just wanted to understand the scenario out there. I mean, when it comes to the auto sector, and we are doing very good when it comes to broadcast and communications. So how do you see in your interactions with the clients, we see a lot of companies now kind of first trying to move towards a cloud, which seems to be very important and then trying to spend on R and D and all this stuff. So how do you see that panning out for the company in your interactions with the clients across segments? Sure. I think you've asked a number of questions, I if you try to other investors, but I suggest that we answer this quickly. The pipeline is looking good both in in in in all the all the three verticals that we are operating in. The the the the what is it, all the books that we that we are carrying forward is also very healthy. I think I think that's why I said we we we are back to a pre COVID momentum in terms of both the the pipeline and the sort of, you know, large opportunities, consolidation opportunities, many opportunities that we are they're looking at. So I'm pretty optimistic, you know, that things would we record back to our growth rates in a precluded time. Thank you. The next question is from the line of Hasmuh Gala from Finvest Advisors. Please go ahead. Hello, sir. Congratulations for a great set of numbers. Sir, I just basically wanted to know that recently, you know, you have announced certain partnerships, long term partnerships, which say, in Vinny, then GEC Sheffler, and partnering with the Google. So I just wanted to understand, you know, what kind of revenue model you will have by, you know, dealing with these kind of opportunities. Right. Yeah. Hi, mister Galo. This is Nitin here. Yeah. Nitin. Yeah. Hi. So if you look at partnerships, I'll take Shapr out because Shapr is not so much a partnership. It's a pure customer relationship. And what we've announced with them is a global engineering center. So you can think of it as a offshore development center for Katsna. Katsna. Okay. Alright. But, of course, it will be multiscale, multi areas. It will be multiyear. So that's the signature of Katsna. But if you look at partnerships like Nvidia or Google, they represent how we can go to market with somebody else. So it is a joint go to market with somebody else so that we can provide larger or more complete solutions to our customers. Mhmm. For example, if you look at OTT, Google and the wide line solution that we have partnered for is really being used to protect content. The idea being that, for example, if if somebody has rights to an IPL and they wanna make sure that their IPL video is being transmitted only to people who have subscriptions or our legal subscribers, then you will need some way of confirming this. And therefore, digital rights management and the content protection that Google offers, right, along with any OTT service. So now how does that work for us? It is a natural complement when we go into the market to help customers integrate OTT services that look they want to take care of content protection. Similarly, can start Invidi. Invidi is one of the world's leaders in addressable ads, which is how do you deliver an advertisement to a subscriber based on their profile, their background, which home they are in, which geography they are in and so Again, naturally, it complements our capabilities and our offerings in OTT by saying, look, we not only can help you deliver a great video OTT platform and a service, but we'll also bring you opportunities to protect content, we'll also bring you opportunities to monetize content by providing better addressable ads, better targeted ads and so on. So partnerships are typically used, one, to make our services more complete and to improve our own value proposition. Okay. Thank you. Before we take the next question, a reminder to participants to please limit your questions to one per participant. The next question is from the line of Mayank Bawla from Dalal and Brocha. Please go ahead. Good evening, and thank you for taking my question. My question pertains to the top client. We've seen some sort of improvement in the top client account in this quarter. Going ahead, could you if you could give us some qualitative guidance if we can expect similar momentum or better than this in the second half? No. Again, it is I I mean, it is good that we had a, you know, a a good quarter as well as as far as our top customer is concerned. We'll be happy to retain at this level because the outlook is well, it's definitely better than what we have seen in the previous quarter. But still, there are some uncertainties. So we don't want to guide anything that missing the those things will be very different. We're happy with this current level. Thank you. The next question is from Dipen Mehta from Elixir Equities. Please go ahead. Yes. So my one question have been answered regarding the top client. Second is that this work from home, is it really a viable option to reduce cost or it is a passing phase and eventually costs will come back to the normal level? No. The cost as far as, you know, you know, travel times and, you know, all of that is is is reduced. Right? But IT cost and all of all of them have gone up. So actually, if you look at it, they cancel out. And unless you you start, you know, closing down your offices and, you know, trying to reduce costs in that way, you will not gain any significant cost advantage by employees working from home. So as of now, we have not closed any offices. Offices are we continue to maintain all our offices. Here, we'll take a call based on how the entire pandemic stands out. Thank you. The next question is from Raj Rishi, who is an individual investor. Please go ahead. Yes. Hi. I just want to find out whether like what sort of possibility is there for nonlinear growth? Hi, Raj. This is Nitin here. Yes. Can you look at opportunities for nonlinear growth? Obviously, it would be similar to any company that you would see in this space, which is one, you either go significantly towards products. The logic being that, yeah, you build it once and you sell it to many unlike services, which is account and linear. Option two would be that you go and acquire somebody else and therefore, anonymity look at accelerating the revenue. We have initiatives going on both. Okay. Presently, how much of it would be your IPR based revenue as a percentage? So right now, it is sub-five percent. It's in the low synergies. Okay. And what's the aspiration, if you can share it with us, in, say, two, three years? So I would rather not call it so much as a product versus services aspiration. I think it is really of a movement towards solution, I think. I have seen that our customers look at what they need to do in their own digital transformation. It's not just product that will answer it. It is solutions that couple products and certain accelerators along with services. And I think that is our aspiration that it should strengthen our value proposition rather than become the value proposition. Okay. Okay. Can I squeeze another question, if it's possible? Since we are limiting it to an hour, if you can kindly come back. Okay. Okay. Thanks a lot. Thank you. Thank you. Thank you. The next question is from the line of Nitin Shakvekar from Green Capital Single Family Office. Go ahead. Afternoon, Manoj and good afternoon, Nitin. Great set of results. My question pertains to the cash reserves and the cash on books. So approximately, there is about INR 900 crores to INR $9.50 crores approximately as we speak in the quarter. Now what is the plan or strategic plan of the company to improve the return on capital employed and return percentage on the cash which is on the books? Is there any strategic form of payouts or buyouts or acquisitions plan? Thank you. Yeah. As Nathan has, you know, answered the previous question. We are definitely planning to see how we can use this cash reserves for inorganic options. Right? So so, yes, so that is so there are some discussions going on. And this issue of that allocation is also discussed at at at both level. So so we are working out for an option in in, you know, in in terms of if if you're not able to use these reserves effectively, you know, what do you do with it? There are there are some dislocations happening. So it's pretty early to come back and tell you what the allocation policy will be, but how effectively we'll get back to you on this. Thank you. I hope that sooner than rather later because last quarter also we discussed this, but I'm presuming that the management has taken a call on that in increasing the ratios and that. Thank you. Sure. Sure. Thank you. The next question is from the line of Naveen Ghotra, an individual investor. Please go ahead. Congratulations, sir, for excellent set of operating numbers. I must say highest level top line and bottom line on PPM basis. We have achieved that. So congratulation to the team. My question is regarding the capital allocation policy. We have already all the and we have the. My question is regarding the platforms business. We are we are living around, I think, eight to 10 platforms. So what is our overall strategy to monetize the platform business and how many are the in the business we are using? And how many are in the development stage? Mister Botra, this is Nathan here. So maybe I'll answer that question. Yeah. Yes. In some sense, I'll go back to the products part. Though products look very nice in the sense that it does look like you just have to develop it once and you can sell it infinitely without any further cost or effort. The reality is platform and products do require continuous investment. And in essence, at times, they can also be more difficult than the services business because services you deliver when required. While products, you'll have to keep announcing, keep developing even if there are no active customers simply because you want to make sure that it can complete successfully in the market that it operates. So to that extent, I think what we are definitely and consciously doing is making sure that the platforms are part of the value proposition that we give to customers. So for example, products like FalconEye or an Automate, which are products meant to automate test and validation for media or for automotive is part of our service offering for test and validation services. Similarly, if you look at OTT, even as you go and talk to customers about how we can help them OTT services, t play becomes a platform approach. And it's not that every customer will take a platform, but a certain customer is like who may only choose to take a part of what we have, like Optimal nine. And while it's a full Optimal platform, customers will choose only a single module, but what it leads to is services around that module and others. So our hope is and our plan is definitely to make sure that for every percentage of revenue that a product or a platform brings, we would like two, three more percentage to come from services and that services to continue beyond the first year to become a longer tail of revenues. So that is really the goal. Okay. So regarding how many of your accounts are currently in the business? And how many have that development? Right. So at any point of time, we have got one or two active in every verticals. If you look at media, we have T, Play, FalconEye. If you look at automotive, we have automobile, we have Automate. If you look at medical at this time, we really do not have a full platform. So we are investing in one or two in each of these verticals at this time. So there are some in development which have not yet announced. Thank you. The next question is from the line of Vijay, who is an individual investor. Please go ahead. Hello. Hi. Excellent results from valuations team, Alexey. And my question I have a question and one is on the new opportunities that you were actually looking at, like, you know, to stabilize your numbers. How do you get the space technology, which has a potential of $50,000,000,000 in in our country by 2024? That's one. Number two, I think, you know, a month back, I think I've seen something on the parking technology that you were about to come on. Can you also give some a certain kind of light onto that? Yeah. This is Nick and Jill again. Can you repeat the second one, please? Auto Auto Okay. Perfect. The parking. Yeah. Parking. Sure. Sure. So I'll just take them one by one. On the space side, yes, we have examined the opportunity. We have worked in in in space programs before, including the Mongolian mission, right, where we where we delivered the telemetry unit that went on to the mass program. So it actually was part of the mass targeted unit. So we have delivered certain work for space. We are looking at what we can do, But however, we also recognize that a lot of these development led programs. So to that extent, the conditions are working and how we deliver, etcetera, quite difficult. So we are not expecting to have any large revenues out of space per se. On the auto parking, yes, that is the in many ways for us, that is the way we see how Automa will play out. Automa is meant to be delivering full level five, full autonomy. While the reality is that many of the emerging markets can never achieve full autonomy because the roads aren't suited and the infrastructure doesn't suit it and the time is just not suited. So we believe that many markets will actually leverage features rather than full autonomy. So for example, auto parking valet systems are something that are quite interesting for many automotive companies. Similarly, jam assist, where in a traffic jam, the car moves automatically, you know how to keep pressing the accelerator or the clutch or the brake. So certain smaller features of autonomy will become more popular. So we are in many ways, if you think about it, remastering autonomy to suit features which we think will come to market much before full Autumn O. So that is something we're actively investing in. The next question is from Pranal Thakkar, is an individual investor. Please go ahead. Yeah. Hello, sir. Congratulations for a great number. And my question regarding the it is in reference to the previous meeting wherein meeting has updated that, you know, the software into this is the telecom industry that's right to go and, like, with the pandemic and, you know, one supervisor can monitor the employee sitting at home. And so just want to understand that if this is platform, what is the update on this and whether this can also be used in other industry as well. Right. To Hello? This is this is here. Hi. I'll take that question. I'm not precisely clear about what you're referring to because I remember that we talked of automation of operations definitely in telecom. And when we talk of network operations automation, it's more to do with the network itself and how you can automate some of the monitoring and control of the network to make sure that subscribers don't have disruption to the services. That continues. In fact, we are seeing very strong interest from quite a few operators in the solution that we have developed and we are developing, right? So in many ways, that is one of the platforms that we are investing in. Now will that apply to other industries? Yes, not directly, but we see that the whole concept of remote monitoring and remote management is a concept that can apply to any enterprise. And we definitely are looking at how we can adapt it to some of the other industries that we work in. Thank you. The next question is from Ravi Nareidi from Nareidi Investment. Please go ahead. Thank you, ma'am. I've been waiting. My maximum questions have been answered, but just I would like to know how many new hireings we are going to. We're going to make in the current quarter. Is that the question? Yeah. Yeah. Yeah. So we we have the the we have we have hired we have actually hired about 300 fresh grads from the colleges, and they're not yet being onboarded because of the pandemic. So we plan to onboard them in this quarter in q three. On top of that, we may have between anywhere between hundred and hundred and fifty lateral people that we would hire. That, again, depends on the requirement and and so on. Right? That's an average, you know, that that they can hire. Thank you. The next question is from Deepak Suhr from Saphia Capital. Please go ahead. Yeah. Thank you very much for the opportunity, sir. So just I wanted to understand in terms of your revenue, like, if I see the last ten, twelve quarters, we have been in the range of INR $3.80 to INR $4.20 crores. In that range, we have been doing. So when do you see the next leap of growth that would be coming to us, maybe if you take a view of next two to three years? Thank you. I'm not sure when you say ten quarters that we have been in the March. I mean, ten quarters, maybe we have been from 300 levels or three twenty levels. We have we would have grown to to four thirty even so on. So our expectation is we'll be able to continue this sort of a growth, you know, there won't be any sudden jump because sudden jump will happen maybe if you have an inorganic option and so on. But otherwise, the accelerated growth that we have demonstrated in the quarter, we hope we will be able to maintain that growth near about the same levels. 10%, 12% is what? Annually, constant currency basis, we should definitely grow 10%, 12%. The next question is from the line of Harish Kavalkar, who's an individual investor. Please go ahead. Sir, good afternoon, and congratulations for your results. I just I'm just going through your customer concentrations. You have that presentation. So what is the reason the the concentration decreases over the period of quarter on quarter basis? So could you please throw some light on that? You had added more customers or you have late revenue from the same customer? No. We have more or less, you know, that we were in the previous quarter. Right? There's not there's not been any, you know, great change, I would I would say. If you look at the top 10 customers, they have been at 49%, 50% and all. Right? That's been the case in q two last year, we were at 50.7. In q one, we came down to 48.6. This quarter, we came up to 49.3. So we are in and around the same so, essentially, what we're trying to say is the top 10 customers as the company grows, the top 10 customers are also been growing and growing almost in the same ratio. So I think these are good metrics to have. The next question is from the line of Ashish Agarwal from Principal Asset Management. Please go ahead. Yes. Thanks. Sir, most of my questions have been answered. Just a couple of things. First of all, on the industrial design business, right, that business has been very volatile. Yeah. And this quarter has been seen a good growth, and we have indicated there's good pipeline. So just wanted to get some sense on that business and maybe some sense on the profitability of that business. Secondly, on the offshore on-site mix. Right? So obviously, there was a significant increase in offshore. Wanted to understand once things become normal, do you think that this ratio could change towards on-site as there will be more travelers, etcetera? Or do you think that this type of a shift over a longer two to three year period is here to stay? That's it. Yeah. Let me take the second question first. Personally, I would tend to believe that this this is here to stay. You know, it it may not queue so much once the title and the official lags, maybe maybe on-site ratio may go up slightly, but it'll never go to the fifty fifty or, you know, sixty, forty, 50% on-site and 40% off. I mean, those days are gone. Think I think maybe they'll eventually settle down to sixty forty or, you know, 40 being on-site and 60 being offshore. I I didn't lower lower lower than that. Right? So because customers and, you know, individuals have, you know, realized that, you know, you can achieve a lot. You you you may not maybe next to the customer. You can work remotely. So so so I think, definitely, I feel that, look, you might most be a sixty forty or a sixty five thirty five sort of a ratio eventually. Right? Now coming to the first question on IDV, if IDV has been volatile in the in the in the last quarter, beginning of last quarter, we have a management change there. We have a we have a we have a new person who has taken over as the head of the industrial design business, and we are rethinking the strategy and, you know, we are aligning the business more towards the EPD verticals. We have also restructured the the sales team and lot more EPD sales team members are now carrying IDB, you know, numbers also. So there is a lot of cross sell happening with existing customers. So I would say the focus for us is, I mean, it's definitely to be a design led, you know, company. That is a clear differentiation that we have with regards to competition. So in the next two to three years, I would see IDB revenues growing much faster than EPD revenue. That is what, as an organization, we are focused on, and that is why our investments are going in. That's where the sales team sort of focus is there. And I believe that next two to three years, this will be a very, very key focus area and business for us, right? Margins are definitely lower than EBITDA at this point in time. That is because, you know, the the top line has not grown. The availability is on the lower side. But once we once we have this customer acquisition and so on, you know, margins will go back. A lot of the investments on the ground in terms of people and so on have happened. There is a leg room for, you know, increasing the ability. So I think margins can can only go up as as as long as our business grows. Okay. I've answered your questions. Thank you. The next question is from Hittend Jain from Investcorp. Please go ahead. Yeah. Hello. I hope I'm audible. Sure. Yes. You go ahead. Yeah. Yeah. So what explains the 14% sequential growth growth in other expenses given that a large part of it is from travel and discretionary, but should have also ideally been muted this quarter. So what explains sequential growth of 14% in other expenses? I think that is the H1B without charges, right, that we have to it has been charged in this quarter. It's a onetime sort of a thing. Okay. But oh, okay. Okay. And and the your other income was quite low this quarter. Also, was there a significant ForEx loss? It's a little bit of 1.9 crore loss. I think it is it is not that significant. Yeah. And also, other thing was because in yeah. The interest of portions came down because we had, you know, paid paid out our dividends last quarter. Right? So so the amount the the interest bearing deposits came down. So I think that is another reason why other income is down. And of course, rates are also going down. Banks don't give us perfect good leverage, yes, what they used to. The next question is from the line of Rohanad Wang from Multiakt. Yes. Am I audible? Yes. You are audible. Sir, two quick questions. First, on Medical Devices. In the past, you said that it could contribute, you know, 25% of revenue over three years. So just wanted to understand, you know, how is that vertical moving? How do you see the pipeline? And I think it's margin accretive. So does that stand? And is this more than annuity business, or is it, you know, typical e r and d business? So project ramp up, ramp down can give a two a lumpiness. K. This is first. And secondly, sir, on export incentive, there has been some, I think, notification that it will drastically reduce going forward. So can you quantify how much export incentive did you get, say, last year? And, you know, and and and if you heard anything on whether you'll get them this year? Thank you, sir. Sure. Yeah. So I have maintained that in a three year time frame, our medical business should be about 20%, not 25%. And I think we are on the journey there. I think this quarter, almost 9% of our revenues came from medical business, So which is definitely positive. I think last year, we were about 4% or 5%. Now we have come up to 9%. So definitely, there is a lot of focus happening on the medical side and and as I've told in the previous call also investments in terms of sales and consultants and and so on and so forth, all of them have happened. So so that is something that, you know, we are we are pretty positive of. Make a business as multiple types of opportunities. Yes. There is a we are in the there is a product design for our business. That could be a contract based business. But then we have the entire regulatory fee, which is more annuity annuity based and you know? So so you have a mix of both project based as well as annuity businesses. But the good thing is we do see a lot of long term, you know, multiyear contracts in this business. And as you said, you know, margins are pretty positive there. Right? So so from from a medical business perspective, definitely, we continue to be bullish. Regarding the export incentives, the export incentive rates are still not announced by the government, and we really don't know, you know, what will be the rates and so on. So so last year, it was about 4 crores per quarter. Okay? And I think from the last quarter onwards, we have not taken we're not showing a a big incentive at all. Alright? So we are still waiting for the government to to announce the rates and so on. So it's approximately 4 crores per quarter. But the last two quarters, I think we are not concerned with the amount. Thank you. The next question is from the line of Haspur Kala from FinWest Advisors. Please go ahead. Yeah. Sir, I would just like to continue my question because I was in cut off. You know, these new deals, etcetera, which we are entering, how are they going to change our revenue profile? So are we going to get any revenue share from these partnerships? Or how is it going to work out? It all depends on deal by deal basis, right? There is no one answer there. Some deals are on revenue share, Some deals are the traditional time and material or fixed date. So Mhmm. Having said that, they are they are pretty open to see depending on the nature of business and the customer that we are dealing with. We're pretty okay to even go from a value share perspective. We are actually done such deals, and I think that has been, at least in our experience, it has been pretty good. But, however, it increases the risk profile, and we have be careful while we are picking up those deals. And, sir, COVID has opened up some new opportunities for us. What has opened up new opportunities? New new opportunities. COVID. Yeah. I I can take that, mister Balaj. So I think COVID is important. One is the it is actually the transformation towards anything that allows operations to continue without disruption. Mhmm. That's why I think one of the previous ministers asked about what we're doing in in automation of operations. So once we think about that, that is really coming from it's being accelerated the code, where operators and enterprises want to make sure operation are not disrupted. So can you do remote monitoring, remote management, remote subscriber service management and so on? But the second part that is happening is that certain classes of devices in medical have also been accelerated development. For example, ventilators and so on, including reengineering of ventilators to build them for lower cost, cost profiles and so on. So I think we have seen projects like that. And what is happening on the telemedicine? I think in one of the interviews, CMD said that you look at good opportunities in telemedicine space. That's right. So we are already working with certain customers in telemedicine. We already are supporting certain telemedicine providers in software development and platform development. But however, we are also looking at what parts of a telemedicine solution we can support with our service. And sir, the last question from my side. You said that you are looking at some M and A opportunities. Can you give us broad outline as to which are the areas we are looking at? Mr. Dalla, that could not be that's not publicly declared, but you can imagine that it is to accelerate accelerate our current verticals and our current case. Oh, okay. Okay. Thank you very much, sir. Wish you all the best. Thanks. Thank you. Thank you. The next question is from the line of Bharat Shed from Quest Investment Advisors. Please go ahead. Hi, sir. Congratulations, mister Raghavan and Nitin on a very excellent performance. Thank you, sir. Mister Raghavan, you just made another remark that now we are back to pre COVID level growth in terms of the growth and all. And still, this type is very strong. And if we expect to grow, say, in the 6% kind of a Q o Q range, 5% to 6%, which implies that annualized growth of around 20 plus per. So how do we really see from three years' perspective? You know yeah. So first thing I would like to say is, look, I would I would really want to wait for a couple of quarters more to see that this this growth that we have demonstrated is sustainable. We believe it is sustainable, and we are working in that direction. So even even before talking about this I mean, of course, we have our three year plans and our strategies around that. But if we are able to continue to grow in these growth rates in a three year time frame, we will definitely be able to produce pretty good results, right? Yes. Can just add, I think what we're essentially saying is we feel very clear of markets based on customers, industry progress, technology progress and so on. If you look at COVID, that is a disruption and this caused uncertainty both on the demand side and on the supply side. So that uncertainty cannot be addressed by any direct projection. I think we just have to wait a little bit. We are making sure that we cover all the other parts, projecting where industry will go, technology will go is our job. But what happens fundamentally in terms of economics and macroeconomics will come up there. Yes. Thank you. Before we take the next question, a reminder to participants to please limit your questions to one per participant. The next question is from Naveen Bhotra, who's an individual investor. Please go ahead. Yeah. Just condoning from the last question, some different type. If you see the last four quarters result, x of JLR, we are growing by 15 to 16%. And when we see x of JLR top 10 accounts, For the last three quarters, we are growing by 21, 22%. So how you would like to in view of the commentary, how would you like to guide us? Because in in the phone call, you said that we will be doing q three of last year. We are not only done the q three of last year in this q two, we have exceeded that by Yeah. Two three percentage. So if you can guide for me second half seeing all the the trends of x of JLR. So are we going to have around 18 to 20% of drop to seeing the strong deal pipelines? If you can guide us, sir. Thank you. We we don't give these guidances, so that's what that's the dilemma that we had. But you can see that the confidence of the management, I think, you know, I think definitely h two will be much, you know, better than h one because we had a poor q one. And and that's because of COVID, and that's not just us, but the entire industry. But the good thing is we have been able to bounce back faster and much more aggressively than some of our competition including the large companies because, of course, because of the small base. I think this sort of a growth is sustainable, and we see that deal pipeline in H2. I mean, I can't give any further commentary saying other than saying that we are bullish. Thank you. The next question is from the line of Mayank Bawla from Dallal and Rosha. Please go ahead. Sir, I would just like to ask, will the second round of lockdown in Europe impact the revenues from there? If you could give some, you know, opinion or views. The revenues I mean, even now, we are considering it as lockdown only. Right? We have not been able to travel. Nobody is going everything is done virtually. So whether a lockdown is officially announced or not, it is almost like lockdown for us only. So I don't think it will matter for us. Thank you. The next question is from Nimesh Shah from MK Investment Managers. Please go ahead. Yeah. Thanks for the opportunity. Since sir sir, the Shapler deal, had the revenue started flowing in or when will that basically, when the when will the revenues from that deal start flowing in? Mr. Shah, yes, we've already started on the engagement. So we already started off with the initial core teams, and we expect that to continue and grow. So there is some revenue that we reported already in the quarter that has actually come from the Shapler engagement. Thank you. The next question is from the line of Varun Sharma from Franklin Templeton. Please go ahead. Hi, Manoj. Hi, Nathan. My question is basically on, you know, how have our sales team and and approach to, you know, newer customers changed because of this COVID. If you can just elaborate on that, and how are you taking up marketing activities customer in different markets? So Varun, I'm not sure if you heard the question right. Can you just repeat that, please? No. How was the sales during COVID, how are they doing sales and how are marketing activities? So sales, I think the good thing is, you know, because of COVID, what has happened is they'll be working from home. So including senior people in customer organization or the, you know, prospects organization, they're working from home. So it is relatively we I mean, we believe that because of COVID, we have been able to reach to the decision makers quickly. They're able to give time to us. So so everybody is working remotely. So instead of for me instead of going to office and having those meetings, we are having those meetings remotely, and that is working perfectly fine. In fact, would say it's better than, you know, during the pre COVID era. Marketing, yes, a lot of marketing now is focused on, you know, digital marketing and so on. So there are I mean, you would see our if you look at it, our social media presence, you would see that if the social media presence has has increased drastically in the last quarter. Number of, you know, releases that we are making and, you know, solutions that are being offered and so on. So so, yes, marketing is moving digital, and I think that will that is the way to go. Thank you. The next question is from the line of Senthil Manikandan from ICOT Financial. Please go ahead. Hello. Can you hear me? Yes, please. Yeah. So my question is first, specifically to the transportation vertical. So, like, how do you see the automobile side, like, the OEMs or the tire on tires? How they are giving any outlooks for deal structures over there? Yes. You know, we have some growth in automotive sector. What that means is demand is picking up. But as the demand, you know, picked up to an extent of pre COVID, I would say it's it's still maybe a couple of quarters more. But definitely, what is happening because of COVID is we see, you know, we see other OEMs and their ones, you know, trying options to consolidate vendors and to bring down their overall costs to move away from high cost outsourcing to, you know, low cost countries and so on. So so we see so we see, you know, definitely demand is is better than q one, but I but I I would I would I would, maybe wait a couple of quarters more to really see if we have touched a pre COVID sort of the demand momentum. Thank you. The next question is from Bharat Shed from Quest Investment Advisors. Please go ahead. Hi, sir. Thanks again. Earlier, just I wanted to understand that when we are talking of moving from, say, on-site to offshore and all, so how does that really of course, sir, it's a better profitability, but the revenue side, could there be any impact on because of that? Of course, there's an impact. So you you so so what is hidden in this is the sort of deals that we have won to be able to accelerate our revenues in spite of the on that outflow ratio going the other direction. So I hope you are able to understand that that's the type of deals that we have won. The next question is from Vijaya, who an individual investor. Yeah. Hi. Thanks for taking my name. One question I have in I know on the Tata Group itself, you know, I think the group is coming up with super app. Is Tata LXC also playing some role in that? No. We are also listening to or or hearing about you know, reading about the articles. We are talking to Tata Digital, the company that is making those apps. There are some opportunities, especially from the industrial design perspective. We are we are discussing with them, but right now, we are not doing anything. But, I mean, there's no activity. The title is performing on the Zipper app, But that is that could change moving forward. Thank you. The next question is from Uman Shah from Asian Market Securities. Please go ahead. Hi, sir. So to the r and d, they've done in auto company for the next two to five years. Sir, I wanted to ask, whatever r and d was done by you in, say, 02/1516, how much do you see on road with implementation in 02/1920? And sir, connected to this, do you think that the decline the delta in innovation is declining or it's accelerating in the automotive itself? Right. So Mr. Shah, this is Nitin here. I'll take your question. So if you look at how we work with automotive companies, whether it's suppliers or OEMs, we work on programs that stretch anywhere from the next year's model year to very advanced R and D, which may be only about seven, eight years' time, where you get into advanced research, you confirm that it's production worthy and then you implement and then you deploy. So to that extent, I think every year we will see work that we've done in the past, partly because some of it is very near term, it was projects done some two years back, some of it is projects done a little longer back. So that way, we will obviously agree. In terms of innovation and change, that delta will increase, but it will increase in certain areas. For example, OEMs will and the automotive industry will spend a lot more on digital and software. They will spend lesser on mechanical and materials. So that is where the delta so the overall spend may increase or decrease, but proportion of spend towards software, electronics and digital, I think, what will go up. The next question is from the line of Manish Bandhari from Valium Capital. Hi. Good afternoon. I have one question regarding the use of excess capital on your balance sheet. You did you did towards evaluating some kind Is there any thought process which is going on or maybe there is a bit of a better use that which you can the way TCSS and a buyback also? Thank you. No. So we've we've discussed this at a at a board level. There's nothing to report. And as and when we have certain, you know, decisions, we will get back to you. Yeah. There are some thought process being discussed. You. We'll be able to take one last question. We take the last question from the line of Apoorva Prasad from HDFC Securities. Please go ahead. Thanks for taking my question, and congrats, Manojin, a great set of numbers. My question is on the sub segments within Transportation and Media Broadcast. How are they tracking at least? There's a lot more focus there, and it was, I think, mid single digit percentage of its revenue. So how would that be tracking the last few quarters? That would be my first one. So Akhil, there is Nitin here again. As far as automotive is concerned, I think what we are seeing and we continue to see is that connected and infotainment will be continuous to lead and accelerate that's very near term, while electric follows and ADAS comes last. ADAS, are definitely seeing slowdown, but I think what you're seeing pickup in in the implementation of features, which are a little more immediate rather than full autonomy, auto car parking valet or traffic dynamics, so features like that. When it comes to media, think we're seeing, I think almost all around growth and similar acceleration. Within that, I think two pieces accelerate most, one is OTT and you know it even from conducting patterns. The second is broadband and data led services, simply because that is an enabler for OCT in any case. So with respect to who you consume media accounts, you definitely need broadband and data services from your operators. So that is the way I would look at it. Medical, I think, has been unaffected, so it continues. Yes. So so, Nitin, how would the size and scale of these sub segments be currently so be it new media, OTT or some of the adjacencies that also you are looking at within the transportation segments? I understand we are not really calling out this percentage, Akulo. So hopefully, we'll mature to that in a quarter or two in terms of starting to call out the sub segments. But I think as far as adjacencies go within transportation, I think we have mentioned that that is about 4%, 5%. What we're doing in rail, off road, etcetera, think in the low in the single digits for us right now as far as overall automotive or the transportation business goes. Right. And just finally, any scale consideration in terms of the inorganic, which is done any any ballpark numbers in terms of what is the scale of acquisition that you're looking at? Not really. Not not at all. Okay. All the best. Yeah. Thank you so much. Thank you very much. We'll take that as the last question. I would now like to hand the conference back to mister Vedanathan for closing comments. Yes. I, behalf of Tata Electric, thank you all for joining the con call. And I would also like to thank Manmithin and Manot for taking the queries. Hope to see you in the next con call in January. Thank you. Thank you. Thank you. Thank you very much. On behalf of Tata Electric Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, may now disconnect your lines.