Rose 5.5% in telecom, media and technology, 2.9% in BFSI, 5.2% in healthcare while manufacturing and consumer services declined by 4.1%. If you enter July 1st, we have announced the salary hikes for all our employees as per schedule. Unlike some of our industry peers, our LTM attrition further improved to only 9.8% from 9.9% in the last quarter. Our gross profit stood at 30.5%. Sequential growth of 20 basis points Q-on-Q and order book remains healthy. We saw continued resilience in our key accounts and a healthy pipeline of AI driven deals fueled by our ongoing investments in emerging technologies. Looking ahead, while we anticipate some macro driven variability in client budgets, our diversified portfolio and focus on high value offerings positions us well for sustained momentum. With that, I will now request Pulkit to provide an update on critical financial data.
Thank you, Manish. Good day, everyone. Thank you all for joining this call. I will take you through some of the key business and financial metrics for the quarter ending June 25. Overall macro environment remains challenging with growth slowing in both the U.S. and Europe along with business capital expenditure showing only marginal improvement. We are seeing CIOs pausing on net new spendings due to macroeconomic uncertainties. However, Gen AI remains in demand. 62% of CEOs and senior executives identified AI as defining the future of competition for the next 10 years. We are committed to fostering sustainable relationships with our clients by leveraging robust farming strategies enhanced with AI-driven value propositions and cost takeouts and cost takeout deals. The reported revenue for the first quarter of financial year 2026 stood at $162 million, reflecting a growth of 3.3% sequentially in reported terms and 1.9% in constant currency terms.
Our EBITDA this quarter stood at 15.2%, a drop of 40 basis points quarter-on-quarter decline was majorly due to investment in sales and marketing and increase in travel and other spends. Our FAD for the quarter stood at 13.1%. Some other key highlights: quarter-on-quarter growth in all key service lines, added order book of $172 million in this quarter which is an 11.7% growth YoY averaged in Europe. Our order book is increasing with more complex and high-quality engagements including managed services. Cash including investments stood at $315.7 million. CSOs improved by one day sequentially and stood at 72 days. On ESG front, we have successfully completed reasonable assurance audit for BRSR code and limited assurance for selected GRI parameters for FY 2024-FY 2025 for the first time and submitted the same score assurance report on Stock Exchange.
Our CGP score for 2024 has been revised from C Awareness to Peak Management level post core appeal. With that, I will now invite Vijay , our Chief Operating Officer, to comment further on Q1 FY 2026 results.
Thank you Manish and Pulkit. Greetings everyone. I will share details about our operational efficacy, service line performance, and AI journey. Our utilization for the quarter stood at 84.3%, which is 40 basis points higher than year-on-year. Rigor associated with accelerated fulfillment and capability enrichment continued in Q1 FY 2026. We had a gross addition of 728 employees this quarter. Our voluntary attrition reduced to 9.8%, which is a 10 basis points reduction sequentially and a year-on-year reduction of 80 basis points. We have reorganized some of our service lines to deliver additional value to our clients. Our advanced engineering services, experience and engagement services practice have now been reorganized into products and platforms including CMO services.
The share of revenues from our service lines increased to 68.9% in Q1 FY 2026, which is 170 basis points higher quarter-on-quarter and 380 basis points higher year-on-year on a quarter-on-quarter basis. Products and platforms including CMO services grew by 10.1%. Cloud infrastructure and security services grew by 5.2%. Data engineering and analytics grew by 2.5%. Enterprise application services grew by 1.3%. On the AI journey, we launched Zen AI, our Gen AI accelerator platform. Our clients have been extremely appreciative of the key features of this platform, namely connected intelligence, multimodal search, and enterprise grade agentic AI models. Zen AI increases engineering velocity, enhances value realization and legacy modernization programs, and helps optimize AMS and IT operations cost. Underpinned by a solid responsible AI framework, prompt guards, and agent observability engines, this platform ensures transparency and helps democratize AI.
We continue to deliver significant value to our clients in key AI engagements. A couple of examples: we partnered with a leading global fintech company to develop a Gen AI powered solution that helps customers identify a wide range of suitable investment opportunities by aggregating data from multiple stock exchanges and financial data sources. The innovative use of Model Context protocol enabled implementation of streamlined workflows and unlocked smarter decision making in the retail operations space. Leveraging this, a South African retailer has been able to reduce manual efforts by 65%. In Q1, we significantly accelerated our AI capability building initiatives by enhancing our Ignite AI Academy learning programs across foundational, deep tech, techno functional, and thought leadership dimensions. The enhanced programs have received highly positive feedback from our clients and are driving meaningful outcomes.
Gen AI capability enrichment has now been made mandatory in every employee's annual learning and development plan. With that, we can now open the line for questions.
Should we open the floor for questions? Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nitin Padmanandan from Investec. Please go ahead.
Hi, good evening. Congrats on the quarter. It's nice to see good growth in most first vertical, especially TMT. Do you believe the headwinds on TMT are largely behind us? That's the first one. The second is just your thoughts on MCS. Considering we have had two relatively softer quarters, how do you see that going forward? I have a few more.
Yeah. Hi Nitin, thanks for the question and thanks for your message on the results. Yeah, we are very pleased with the results based on what we are seeing in the industry. I would say on TMT again, you know, I think the worst is behind us. Will there be consistent growth? I am not sure at this stage because as we see every day, some of the larger players are announcing layoffs and so on. I would say the worst is behind us.
Will we see consistent growth? I am not sure at this stage. On MCS, we were coming off a very, very strong Q3 of last year and hence it has been slightly muted. Also, the impact of the Liberation Day is felt much more on manufacturing and retail sector than in others because this is the first, first order impact, so to say, on these sectors and hence we are seeing a little bit of impact there. With that said, I think we should see growth in MCS in the next, in Q2 is what we are projecting.
Sure. Great. From a pipeline perspective, do you think it still looks good and you still think it sort of to that $200 million kind of range that we have had in the past or does that look challenging at the moment?
I would say again it's the uncertainty in the market that will ultimately reflect in the pipeline and also there is a seasonality associated with the pipeline. That's why when we do pipeline comparison and order booking comparison, we try and do it with the same quarter of last year and there we have grown about 12% or so, which is a good sign. Hopefully, we will continue to see growth in order bookings and in pipeline year-over-year in subsequent quarters also. The uncertainty is definitely having an impact.
Got it. Just one last question for Pulkit. Pulkit, how should we think about margins on a going forward basis considering the ESOP cost and other things?
I think one of the costs which is going to play out next quarter is definitely going to be ASR, as Manish called out that we are probably amongst the few companies which have done the salary hikes across the organization, and which is a very reasonable hike I would say that we have taken up. To that extent, will there be an impact on margin? Again, on the ESOP scheme side, it is still outstanding. The scheme is out there for consideration. As and when that comes, t hat will have some impact on margins next quarter. I would urge and request you to kind of have these two factors into consideration when you triangulate the overall mid team guidance that we kind of give on margins.
Got it. Perfect. Thank you .
I would say these two factors are definitely going to have some impact.
Sure. Perfect. I'll get back into the queue. Thank you.
Thank you. The next question is from the line of Manik Taneja from Axix Capital. Please go ahead.
I thank you for the opportunity and congratulations on the steady performance and hardware industry, the sequential growth on the TMT side. Manish, basically since the time you came on board, we have seen a steady increase in our onsite, in our offshore revenue delivery. While you said that we don't plan for a particular number, it'll be good to understand as to how much room do you see in terms of optimizing the offshore revenue delivery. That's question number one. The second question was with regards to sequential premium subcontracting expenses that you have seen. If you could talk about what's driving that. The third one is you continue to maintain a very steady utilization rate while hiring numbers haven't gone anywhere. I'm sure you probably be thinking about hiring essentially catching up with the revenue growth. Those would be my three questions.
Yeah. The first question, Manik, is as I said, I'll repeat what I said before. I don't solve for offshore percentage or on site percentage. I base it on client demand more than anything else. It of course helps us that our offshore revenues are going up as a percentage. It helps the margin. Please also remember that it puts pressure on the top line also because then the top line doesn't grow as f ast as it could be. I hope you guys are noticing that your second question was on subcontracting costs. Pulkit, you want to take that?
Subcon cost will basically come back in line with what it has been previously. There were third party costs which have got incurred this quarter, which will kind of get normalized. No. There has been some headcount increase as well there, which will also get normalized.
What was the third question, Manik?
The third question was with regards to headcount every quarter. You just, you know, it might be our utilization headcount. Largely we manage within a very small range.
We don't want it to catch up with revenue growth. If you are doing a good job on AI and so on, then, yeah, then actually we should be able to deliver higher revenues with less headcount. That is what all AI is all about, right? To some extent. The second is we put in a lot of hard work and effort in maintaining and optimizing our cost model and improving our utilization. As I said, the lead times for hiring, etc., have come down and we have tweaked our model to be in line with the lead time in hiring also. This is a very good thing, something that Vijay, I, Pulkit, and others are very proud of.
The last one was just essentially with regards to the ESOP impact. You could talk about the potential impact on margins from the proposed ESOP scheme. You could just help us understand that from a modeling standpoint on both.
If you're talking about the historical plan, it's a different thing. The current plan is still under consideration. It hasn't been approved as yet. A lot will depend in terms of how the plan gets approved, how also the grants happen because the charge starts happening from the date of the grant, and a lot will basically determine. A lot will be dependent on that.
We remain committed to making sure that we are in the mid teens margin range.
Yeah.
Inclusive of some of these costs we take or the investment, whichever you want to see in this call.
Despite this, it should be in the same ballpark range.
I'll get back to the queue, but just clarify of the V hike that you from July, if you could call out extent of offshore and onshore beach hikes, and is it for all our population, all of your circulation you.
Likely is across the board including offshore and onshore. We don't give a split in terms of how much is there. Of course, the wage hikes in India will be slightly higher versus what you will see in the U.S., and U.K., and South Africa. It is all dependent on that particular geography. We don't give a split in terms of the quantum of the wage hike.
Yeah, thank you.
Thank you. The next question is from the line of Sandeep Shah from Aquarius Securities. Please go ahead.
Yeah, thanks. Thanks for the chance and congratulations again on a good execution in difficult times. Just within TMT, has the top client also contributed to the growth and what has driven it? Is it the earlier areas which we used to target have a higher budget or are we mining that client in terms of entering into new areas? Just wanted some clarity.
We have opened new locos, we are mining them, and obviously for the large client also we are trying to open new areas. It's very difficult to say exactly how much has come from renewals versus this thing. If you're seeing growth, then that is primarily coming from existing, new, and net new. That is where the growth is coming from in TMT.
Any progress in terms of large deal? I do believe we have done well in the second half of the last financial year and in one of the analysts you said we are targeting for one large deal every quarter. Can you give some color in terms of closure, if any, in this quarter and how the pipeline is looking on the large deal both on Q-on-Q and Y-o-Y?
Y-o-Y i t is definitely looking good. I think the pipeline closure depends on a lot of things including luck. All I would say is we are working hard and just watch this space is all I can say.
Just a related question, one of your large peers have said large deals are coming more on cost takeout and vendor consolidation and there is an extreme pricing pressure. Are we also witnessing that kind of a pressure in some of the large deal pursuance?
We don't go after existing large deals, we create large deals. For us, large deals is about being innovative in solutioning, not about bidding for things which have been bid for, rebid, and bids for 15 years in the past. When you do that, then it's always a race to the bottom. We don't want to be in that race.
Just on margin speed question, just wanted to understand is there any one-time R&D credit which generally happens in this quarter and second, in the second quarter we may have a headwind from wage hikes as well as we saw. In the third quarter, because of furloughs, then the margin gets impacted because of the higher benchmark. Pause. In that scenario, you believe the margin work could be slightly tougher in the next three quarters and still we believe we could be closer to 15% for the full year.
Let me give you some qualitative aspects for next few quarters. More importantly for this quarter, the first question that you asked, if there's any R&D aspect to it, all I can say is that if there is something which is, say, one timer, there may be like a compensating element to that and to that extent, basically what you see is more normalized margin than anything else, at least for this quarter. We would rather not go into any small one timers here and there because that is part and parcel of the business. May happen, may not happen. You can ignore that for now. That's a response to your first question. Second, going forward, I think as I have mentioned before, there are two factors which are going to play outside ASR and ESOP as and when it gets approved and implemented.
The time frame of approval is what we know. A time frame of implementation is something which we do not have full clarity as of now. That will also determine basically what next quarter looks like and quarter after that. Also, will these two factors have some impact on margin? Absolutely, they would. At the same time, are we taking actions on costs? Are we tapping on to other levers? Yes, to that extent there may be a need lag effect, but you should factor these two aspects at the same time. We will exercise those levers over a period of time. They may not be a matching concept on everything all the time. Right. You have to be mindful of that.
Okay. Just a last clarification to what Manish said in our opening in one of the replies, I think offshore has increased materially. Is it fair to assume volume growth is actually much better with the headline growth of 1.9%on Q-on-Q?
Yeah, volume growth not in terms of number of people, but you know, our PPR and PPC has been increasing slightly, so to say. The whole idea of using AI and all this is trying to do just more with less. It's kind of difficult to break up and say because if I say volume then you will say oh, last year, last quarter you had 10,700 seats, this time you had 10,600 seats. It is not your volume but it's a factor of several things including improved productivity, improved utilization, and better PTR and CTC.
Okay, thanks. I may come in the follow on the best.
Thanks.
Thank you. The next question is from the line of Shraddha Agrawal from Asian Market Securities. Please go ahead.
Hi sir. Congratulations on another good quarter. Two questions from me. Last quarter we had highlighted our aspiration of double digit growth in 2026. Given 1Q has been a broadly good quarter for us, I'm assuming we stay with that commentary of aspirational double digit growth this year.
That was a question, or that's a—
Reaffirmation that I want from your end on the double digit growth guidance.
No, that was before Liberation Day happened in the U.N. First of all, I never have said that we will see double- digit growth. All I said is that we are committing to showing growth every quarter. That is what we are focused on from an execution perspective. We want to be predictable, we want to be sustainable in terms of our margins, predictable in terms of our growth, and that is what we are focused on. I never promised double- digit growth, but yes, I did promise that we would buy and grow sequentially every quarter, which has been the case by the way for us for the last 12/4 except 1/4 since Q3, where there was a large furlough.
Right, on that aspect again, with steadiness in the top account, do we expect a lesser seasonality of furloughs in Q3 that might happen this year?
The furlough is not just about top account or this thing. Furlough happens in sectors including banking technology. There are certain geographies where furloughs happen. It's too early. I mean we are in July, furlough happens in December. It's too early to make any predictions on that. The only prediction that we can make is that furlough will happen. To what extent we don't know.
Right. Just the last question. Our top accounts have done very well this time around, with the top five clients growing almost 5% and top 20 growing 7%. Is it more broad based across the top client portfolio or driven by one or two accounts that we've seen such strong traction?
No, it's broad based. In fact, if you notice, number of $20 million accounts have gone up from four to six. Same quarter last year was four. This quarter it's six. Similarly, $10 million plus accounts have gone up, and similarly $1+ million accounts and $5- $10 million accounts have also gone up. Overall, this is more broad based, and that is the way we like it to be.
Got it. Thank you and all the best. Thank you.
Thank you. The next question is from the line of Girish Bhai from Bob Capital Markets. Please go ahead.
Yeah, thanks for the opportunity. Manish, three months back you had talked about a right shifting of demand especially in the month of March. Has that demand come back in one Q or has it been right shifted again into the next quarter or the quarters ahead?
Now there is a right shifting of demand. That is why if you look at the order bookings they are less than the previous quarter. As long as the tariff uncertainty prevail, you know people will focus on only the essential projects. They will not focus on new capital projects for example and so on. Uncertainty is having an impact definitely and you have seen it in the results of IT companies across the board. I don't know if whatever has right shifted has come back or not but the uncertainty c ontinues to persist .
Okay, on this aspirational double-digit number, you didn't want to kind of commit to that. Would FY 2026 be a better growth year compared to FY 2025?
We hope so. Again, we try not to give forward guidance, and we take the safe harbor statement seriously. We will not give forward guidance, but as a management team, we are committed to make sure that for our shareholders, for our employees, and for our customers, every quarter is better than the previous one.
Okay, you talked about a salary hike starting first of July. What will be the impact from a basis? I mean, the number of the basis points impact and how. What are the offsetting factors that you kind of think about either in the next quarter or the quarters ahead? What are the levers that you're kind of working on?
I think this question has come up now multiple times. Rather than giving you an impact in terms of percentage because the revenue is still something within the works, I can give you a quantum in terms of salary hike. We are looking at somewhere close to $3 million of wage hikes which are going to come in Q2 and as regarding the absorption, something similar to what I said earlier, it is a lead lag situation where the hikes are implemented. The recovery on the basis of prices, on the basis of growth, happens over a period of time. That's the only framework that you will have to work with. If there's a number that you are looking for, it's $3 million in terms of quantum.
Okay. My last question, Manish, is regarding talent cost. While the supply side seems to be pretty good right now, attrition is low. Is there a pocket on the supply side where there is cost pressure still there, like AI talent? Is the AI talent cost inflating at a faster rate than it used to, I mean, than the normal inflation in salary cost?
Fortunately, we don't need people like Facebook needs, where you have to pay $10 million and $100 million to attract AI talent, some super genius or whatever, superintendent or whatever. AI, we are creating our AI talent ourselves. It is not that all this talent is available in the buffet. AI is such a new technology that we have to create the talent from within. I will say that AI is an area where we are going to spend a lot on talent.
Obviously, there will be pockets where the technology costs are higher. Latest cyber security stuff, for example. There will be one or two hot technologies here and there where talents will be more expensive. That is part of the industry.
Okay, thank you. Thank you very much.
Thank you. The next question is from the line of Jalaj Manocha from SVAN Investment. Please go ahead.
Yeah, hope I'm audible.
Yes, you must be right.
Yes, you are.
First of all, congrats on a good set of numbers. Manish, this is one thing, one observation specifically is you talked about the slowdown or specifically in retail and manufacturing. Specifically, you gave a flavor to the U.S. economy. When I see for a sequential growth, it appears that Europe as economy has degrown and U.S. has done better. Where is this mismatch coming from? How should I read these two things together?
U.S. we are executing well. Europe we have not executed as well as we wanted to. Also, there was certain one-off revenue things because of the last deal that we signed in Europe, which is having, which might be creating a bit of a distortion here and there. Overall, we are very bullish on Europe.
I just wanted to understand,
They have a fairly aggressive target for this year.
Okay. I was just trying to understand that you told about that manufacturing in detail not performing so well because of the tariff issues in the U.S., but then the degrowth has happened in Europe economy or Europe as a geography, and usually when compared to the vertical that happens to be manufacturing. This is trying to have a geography flavor there.
Yeah. Geography flavor as I said, we have done, we have signed the last deal which was announced in March. April. April. I think April or May. Yeah. T here have been some distortions because of that in revenues from Europe. Overall, as I said, this will get cleared pretty soon and you'll see revenue growth back in Europe very quickly.
I think the point is that d on't link your macroeconomics with basically our Europe performance, as Manish is calling out that we could have done better in terms of execution, which is what we are pushing to do now.
Understood, understood. That explains, and my second question was with regards to deal wins. Should I consider it that you also alluded in one of your commentary prepared remarks that we have had a managed services flavor coming to our teams? The average tenure is increasing. Should we, shouldn't we have a higher growth or accelerated growth in the deal wins in that scenario? Just wanted to have your thoughts around that. Basically, would it give us the top quartile or the one quartile move each year as we had discussed at the start of Manish's join? Are we comfortable with the current set of deals? When we have in right now?
We can always have more deal wins. Are we comfortable? Based on what I am seeing in the industry, we are, I think, pretty well- placed as compared to others. Can we do more? Yes, we can, and we will do more. Yes, as we do more managed services, we will see larger deal durations, which will be reflected in the order book. As you can see, year-over-year, order bookings are seasonal. As you can see, our order booking has year-over-year gone up by 12%.
Got it. Thank you.
That you just spoke about in terms of how is it reflected in the order book? Don't see it for just this quarter. You have to see it for last, I would say, few quarters and then look at the managed services part. Last three quarters were more than $200 million in terms of order book. It's not that managed services or deal duration is specific to this quarter. It has been the case over last, I would say, four quarters. The deal duration has gone higher than what it was before. All this file. It's happening on this file.
Yeah, thanks. I'll get back to you. Thank you.
Thank you. The next question is from the line of Nikhil Choudhary from Nuvama Wealth. Please go ahead.
Yeah, thanks for the opportunity and congratulations on strong numbers. I just want some clarity on manufacturing and consumer vertical. You have rightfully called out at the beginning of last quarter that this is the working vertical which will get impacted. What's ahead from here on? Is it fair to say that this vertical will also start going, although maybe lower than company average, but will deliver g rowth from here.
At least Q2? I am predicting growth in this particular. Beyond that, again, there is a lot of, and this is manufacturing and consumer is the industry which has the first order impact of parrots. What will happen post that I don't know, but at least Q2 we are projecting growth in this article.
A second one in Africa, we have been going slower than the company average. Right. In last quarter, you have highlighted you have made some strategic investment, also hired some senior leaders. Any update there or has that geography now bottomed out and you are seeing incremental momentum, especially in deal win and pipeline?
Yeah, the new leader has taken over as of the 1st of April and he is on the job. All of us in the company are supporting him and we are seeing some green shoots, but green shoots turning into flowering plants take some time. Hopefully in the next couple of quarters we will see the impact.
Sure. Just one more time. Final luck on the deal win side. The comment you have made that the tenure of the deals are improving, the complexity of deal is increasing. Is it fair to say that your ACV is also showing basically accelerated growth, maybe higher single digit, low double digit type of growth while we have overall deal win number?
No, the ACV is not. If the deal duration is actually increasing, then the ACV is actually going to come down, right? It is not going to increase.
No, Manish. What I mean is with the deal itself growing, is the ACV also growing, let's say high single digit? Obviously, it will grow lower than overall deal win because of the tenure. Is it growing faster, let's say, in high single-digits?
You mean the ticket size of the deals, right? From ACV perspective, the ticket size of the deals is increasing. Yes, that is, if that is your question, the answer is yes.
Basically, I wanted to understand this. ACV is growing on year-over-year basis in the highest single digits, more or less g ivin us an indication of
Guidance will not give that is ACV increasing at a particular percentage or not. Structurally, ACV is going up versus last year. We'll not give any percentage around that or any number around that because that's a direct reflection to the revenue as well.
Got it, got it, got it. Thanks, Manish. Thanks and good luck for coming.
Thank you.
Thank you. The next question is from the line of Nitin Padmanabhan from Investec. Please go ahead.
Yeah, hi, thanks for the follow up Manish. For my question, you alluded to some, you know, head count cuts by large tech companies. Just wondering, are you worried about any risk to the experience services business from this?
Yes, we are worried about some of the impact that it might happen on particularly the marketing side of the experience services business because one of the areas where AI is disrupting significantly is in the marketing space because a lot of content generation is happening using AI and while we are also using it to our benefit, there is a downward pressure on budgets because of that. Yes, it's a good catch Nitin, you're right that experience services, particularly on the marketing side or the Indigo Slides Indigo State side of our business, may get negatively impacted because of that.
Is it a significant portion of the overall Indigo Slate business or just a part of it?
It's a part of it. It's not the significant part of it, but it's a part of it. I mean, depends on how you define significant. This is where business is $78 million quarter business, so in the overall scheme of things it is not that critical for us.
Got it, got it, got it. Did this last year we won two large deals is what I remember. Have those started converting to revenue or are we yet to see them begin to convert or reach the recent?
They have started to convert into revenues.
Right. Have they sort of achieved steady state or will we continue to have benefits from this even on the following quarters?
For steady state of the structure t he deal structure that we use is try to annualize and straight line the revenues to the extent possible because we don't want too many ups and downs. Right.
Perfect. Thank you, Manish. All the best, and yeah, thanks.
Thanks, Nitin.
Thank you. The next question is from the line of Dhanashree from Choice International. Please go ahead.
Thanks for taking my question and great performance in Q1. My question is regarding the last time you had said 44% of the pipeline is AI driven. If you can give more color on how is there any change in that commentary and how is our conversation with the clients with regards to AI pipeline and more if you can tell something on agentic AI, our agent AI focus and how these things are leading t o our growth in focus services. As you spoke about, you know, you are transforming the advanced engineering services a ll into product and platform. What is the, you know, future or long term plan we. Have you set in for this? If you can just throw some more light or elaborate on the strategy, that would be helpful.
As I said in my opening comments, as far as AI and gen AI is concerned, we are not just adapting to change, we are engineering the change. We are one of the few companies who have reported this time formally as to what percentage of our pipeline is AI infused or AI led and also what percentage of our order bookings is AI infused or AI led. We are playing this game to bins. This is fourth in the road. The way we see it, it's the fourth in the road for the industry and we want to win. We want to win this time as the industry turns and we are doing everything in our power to make sure that we come on the. We take the right fork and come on the winning side. I would encourage you to read our press release and our analyst.
This thing, the case studies and so on that we highlighted that is showing as I said in my opening remarks, this is the first time that I told the team to give all the case studies need to be or critical projects need to be AI- led or AI- infused. All the projects are AI- led and AI- infused and it will give you an idea of the kind of work your company is doing.
Thank you. If you can just let me know out of the feed it was net new.
We don't give a bifurcation of net new.
You are breaking up. I didn't hear the question. Sorry.
Out of the total PCB win, what is the net new percent if you can share net new wins.
We don't normally give those breakups.
The last question is on our top client account. Last time when we had interacted, you had mentioned that it has come down from a certain percentage to around higher single- digits. Is this maintained, or has it further come down or increased? I f you can share
It's around 10% or so is what I remember. I'm not tracking it very closely, but it is around 10%.
Okay, thank you. That's it.
Thank you. The next question is from the line of Sandeep Shah from Equirus Securities. Please go ahead.
Yeah, thanks for the opportunity. If I look at the cash generation, it led to a Vodcha stock closer to around 15% of the market cap. Any expected usage of the cash? Are we also looking for slightly bigger size material to accelerate our journey to $1 billion, which may help us to grow even faster once we achieve $1 billion? In terms of outstanding hedges, if I look at it, it has declined on a YoY basis by closer to 75%, 80%. Is there any change in the strategy in terms of hedging?
Right, great question. First of all, you guys should do something about the market cap rather than me trying to do something about the cash. You should do something about the market cap.
You commit double digit growth, it will automatically.
Second thing is, cash is an asset, not a liability. Third is, I will ask Pulkit to take that question as to what he wants to do with all the cash that we have.
Yeah, no. I think when you look at the current cash balance, of course there's a dividend which is outstanding and the dividend roughly to the tune of $29 million will get paid out, I would say sooner than later. You should adjust cash for that. Despite that, our cash balance is good. More importantly, our cash conversion on a yearly basis has been pretty good for the last few years. As regarding future plans, I think we are open. We want to invest, we want to invest in terms of large deal creation, also capital allocation from an M&A perspective. We are always looking for ideas, right? For the right idea we would go in. Of course there are far and few right ideas. We have to be patient and kind of wait for the opportunity to come our way.
I would say that, yeah, I think it's something which is going to help us in fueling growth in many ways. When I say large deal creation, I mean to say that basically we can structure deals, we can invest upfront in order to create large deals, which makes sense. At the same time we'll be extremely prudent in whatever we do. The idea is not to. That's why the cash has got accumulated because we've been very prudent and we've been very mindful of the usage. We'll keep you posted in case something comes up and there's an update for all of you.
Yes. And sir, just on hedges?
Sorry, what was the question?
Outstanding hedges have declined year-over-year by 75%, 80%. Any change in strategy?
The market is extremely volatile, right, and to that extent it makes sense to just be as conservative as you can see t hat is what we are doing. We have moved from certain positions and we are just focusing on, I would say, balance sheet hedges. That's what we are doing. Because in the current environment, taking positions either way is, as per us, not advisable.
Okay, thanks and all the best.
Thank you. The next question is from the line of Girish Pai from BOB Capital Markets. Please go ahead.
Yeah, thanks for the opportunity. You had mentioned that in the Europe U.K. market you had some issues with some large deal. Was this the Tesco deal that you won, and has that, has the Remy kicked in in Q1 or will it kick in starting Q2?
We don't answer questions on specific clients. Girish, you know it well.
You spoke about MCS being impacted because of first order impact of tariffs. Manish, in your opinion, which particular sectors would have second order impact? According to your thoughts.
Second order impact. If manufacturing and consumer have the first order impact and the second order impact, as you know the U.S. economy, 70% of the U.S. economy is driven by consumer and if there is a consumer weakness on the consumer side, everything becomes fair game. Banking and financial services, credit card debt, mortgage, all, everything becomes fair game. As long as the consumer is resilient, as far as diversifying is concerned, second order impact will be limited. If the consumer is not resilient, everything is going to be fair game.
My last question has to do with vendor consolidation deals. In the market, a re you seeing them becoming more competitive compared to, say, from a pricing standpoint, a productivity passback standpoint compared to six months back?
Vendor consolidation deals are a race to the bottom. We don't want to get consolidated out definitely. We have created, in most cases, enough client relevance and mind share that we will not easily get consolidated out. Proactively going after vendor consolidation deals is a race to the bottom. I don't think I am ready for it.
Thank you very much.
Thank you very much. As there are no further questions from the participants, I now hand the conference over to Mr. Manish Tandon.
Thank you everyone. Thank you Shraddha and all of you for attending this call. As always, it's a pleasure to interact with you and get your perspectives as valuable investors and shareholders from a management perspective. As I've said, we are deeply committed to executing well and trying to outperform the industry to the extent possible. Hopefully, we will continue in the same way with the same momentum as we interact for Q2 and beyond.
Thank you.
Thank you very much on behalf of Asian Market Securities. That concludes this conference. Thank you all for joining us. You may now disconnect your lines.