Q4 20/21

Apr 15, 2021

Ladies and gentlemen, good day and welcome to the Wipro Limited Q4 FY 'twenty one Quarterly Investor 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 note that this conference is being recorded. I now hand the conference over to Ms. Aparna Iyer, Vice President and Corporate Treasurer. Thank you and over to you. Thank you, Sanford. A very warm welcome to our Q4 earnings call. We will begin the call with business highlights and overview by Pierre Delacour, our CEO and Managing Director followed by financial overview by our CFO, for Jasindranath. Afterwards, the operator will open the bridge for Q and A with our management team. Before the series starts, let me draw your attention During the call, we may make certain forward looking statements within the meaning of the Private Securities Litigation Reform Act 1995. These statements are based on management's current expectations and are associated with uncertainties and risks, which may cause the actual results to differ materially from those The uncertainties and risk factors are explained in our detailed filings with the SEC. Vitru does not undertake any obligation to update The forward looking statements will reflect the events and circumstances after the date of filing. The conference call will be archived and a transcript will be made available on our website. Over to you, Thierry. Thierry, thank you. Good Morning or good evening, everyone, and thank you for joining us today. It's definitely good to be able to Speak to you again this quarter. I hope you've been staying safe. Perhaps some of you may now be vaccinated. But if not, I really hope you have access to the vaccine soon. In fact, talking about that, I'm happy to share that for our colleagues Based in India, we will be organizing vaccination camps in our campuses As per the guideline set by the government, and we will reimburse the cost of vaccination for not just our employees, but Their families as well, small but much needed relief in a tough year for everyone around the world. But thanks to the greed and perseverance of our entire team, we are strong and more resilient than ever before. As you would have seen, our Q4 performance was built on top of a momentum we saw in the last quarter. We have reported a solid growth in revenues, healthy order bookings And frankly, great execution resulting in robust margins. This sets the stage for the next quarter and The next financial year as well. Now let me give you some more details on the results, right? Let's start with the revenue. Our revenue growth during the quarter was 3.9% in reported terms and 3% on constant currency terms, which is at the top quartile of our guidance range. I'm very pleased to tell you that this is the best 4th quarter results we have reported in the last 10 years. This was led by a good volume growth And despite the steep decline in the Q1 of the fiscal year because of the pandemic, we bounced back to finish the year with, I would say only a marginal decline of 1.4% year on year. Now let's look at the demand. The demand environment right now is robust, and our overall pipeline is pretty healthy. In fact, Our total contract value of order book in the second half, H2 'twenty one, grew by 33% year on year. That is the highest total TCV we've ever reported. You may ask What has led to this performance? First of all, I would say there's an increased activity in the market that we have leveraged very well. But secondly, our numbers reflect the large deals we've been able to close. We have closed 12 large deals, resulting in a TCV of USD 1,400,000,000 This TCV includes a megadeal that we closed during the quarter In our Americas market, which can, should lead to revenue of over $1,000,000,000 over the deal duration. I've probably previously talked about how M and A is going to be an integral part of our business strategy, And you see that in the last two quarters, we've announced acquisitions across several key markets, including the U. S, Europe, Latin America, Australia, India, these acquisitions have Our local presence and our service offerings. During the quarter, we've also announced our largest ever acquisition, Capco. This acquisition of Cavco will strengthen very significantly our position in the global financial services market. It's very clear. We are Quite excited to onboard some exceptional domain experts and leadership talent in that space. We remain hopeful of closing this transaction as early as possible. We also, you would have seen that, announced The acquisition of MPM, an Australian based provider of cybersecurity, DevOps and quality engineering services. This acquisition will help us definitely expand our footprint in Australia and Accelerate our growth in the Asia Pac region. Our strategic mergers and acquisitions over the years Have created a vibrant new age and diverse community of talent around the world. Some of you have noticed that on April 1, 'twenty one, we retired some of our individual acquired brands, And we united 7 such previous acquisitions, thereby truly integrating everyone under 1 brand, One identity and one mindset and ambition that now allows all of us to go to market as 1 Wipro. The 4th point is on margin. Our operating margin during the quarter was 21%. It's a 3.40 basis points increase year on year. Our operating metrics I've shown consistent improvement with utilization and offshoring being at its highest ever. I am pleased to share that we released, as promised, salary increments and promotions, covering approximately 80% of our employees effective January 1, 2021. We are pleased With our rigor in execution, which has also resulted in operating margin of 20.3% for the full year, An expansion of 200 basis points in the financial year. Now what speaks Our focus is that we completed Q4 in an entirely new operating model. This was, in fact, the 1st quarter Under the new organization structure that if you remember, I had announced in November 'twenty. So essentially, We undertook the biggest ever transformation of the company and saw little to no disruption in our market focus. Our results, better than that, change takes time, but I'm pleased to share that we are now well settled in the new ways of working With the spotlight firmly on our customers' needs, there is now a new cadre of leadership that have joined the existing executive team. All key positions have been filled. I'm really proud to say that My senior team is truly diverse and brings to me through the kind of inclusive leadership that is not So typical of our industry historically. But it's imperative that we build local talent and improve Ethnic and gender diversity. Of course, a lot more needs to be done, but I want to take a moment to note the progress we've made. Now let me add some color to the underlying business performance. All our members are in constant currency for Important to note, there is significant traction across all our markets, which means our growth is broad based and therefore sustainable. In Americas, we grew 3.5% sequentially, With most of the sectors showing strong growth, our deal closures will provide a solid platform for next year. In Americas, too, we grew 4% sequentially, that led by a surge in volumes. The demand in the BFSI sector is strong across all service offerings. The manufacturing business is recovering, While our Energy and Utility business is likely to remain slightly volatile, our European market I've delivered a sequential growth of 3.7% on the back of several large BOEs that we've had through the year. United Kingdom and Ireland, Benelux, Germany grew collectively by 5.6% sequentially. Finally, our APMEA market declined slightly. But frankly, that's due to a conscious Exit in some of the low quality businesses in the Middle East market. But what I want to highlight is that All the other regions collectively have grown by 3.6% sequentially. Now looking at our global business lines, The IDS global business line, which constitutes applications, data and engineering, grew by 2.1% quarter over quarter. This was led by a greater demand for our service offerings in digital experience and data and engineering services. Our other global business line, Ichor, grew by 4.3% quarter over quarter With all 3 service offerings, that is to say, digital operations platform, Cloud Infrastructure Services and our security practice growing well. Another indicator of how broad based our growth was is to note that Our top five, top ten customers have grown well ahead of the overall company. Now let me Give you a sense of the kind of deals we are winning. That also gives you a picture of the current business landscape. One of the best examples is what we Already announced the 5 year deal with Telefonica Auto, which we signed in February 'twenty one. As we look at our customers' buying patterns, this deal Truly represents a lot of what we are seeing across industries, and I will illustrate it through 3 aspects. 1, Almost all customers believe that now is the time for radical renovation of their IT environment. While there are many strategies and approaches to a top to bottom overhaul of the ITSA, the goals are similar to significantly change the speed, the efficiency, the cost, the effectiveness of our IT support business grows, Innovation and customer experience. Wipro is very well positioned to serve customers across This spectrum of IT transformation. 2nd, cloud is at the center Conversations. Cloud is, in fact, becoming the computing platform for a large percentage of infrastructure and applications in the future. Whether the conversation is focused on cloud migration or cloud native applications, multi hybrid public or private cloud, Customers are seeking Wipro's partnership in cloud to help them shift their operating models as well as innovating across the enterprise value chain. 3rd, we are co investing in business value and outcomes Outcomes for our customers, demonstrating our long term commitment to them while supporting their funding model. As deals becomes more integrated, transformational and require greater innovation across the ecosystem, we expect More conversations in this area. Another deal that we have won with similar Kontoor is a European mapping and location data company that has selected Wipro to partner in their cloud and digital transformation journey. As part of that engagement, We promise to set up next gen high rate cloud operation centers and build futuristic apps in the mapping domain. We will leverage our home AI robotics platform to enable a fully agile and DevOps organization, Improving productivity and enhancing user experience for the customer. And finally, on to our outlook for the next quarter, we have guided for a revenue growth of 2% to 4% outside of Capco and Ampeon. This will translate into a year on year double digit growth of 11 To 13% for this quarter. This guidance reflects the environment we are operating in, no doubt, our increased focus on the market And our improved execution rigor. We recognize that we are Competing for quality talent, and we are fully prepared to lead the war for good talent. We are Investing in building talent as well. We have implemented several interventions to retain diverse talent as well. In parallel, measures are in place to ensure the supply chain does not slow down our pace of growth. This includes, but it's not limited to: 1, promotion cycles across brands 2, skill based differentiated bonus and third, The rollout of the much deserved salary increases for our senior colleagues in June 'twenty one. Our margins in Q1 will reflect these investments for growth. To summarize, I would say that we are pleased with the current business momentum and the optimistic and we are optimistic about Strengthening that momentum going into the new financial year. All our key markets are growing on a year on year basis, And that's the solid foundation we are starting FY 'twenty two on. A final but a very important point That I must make today is on the philosophy that Wipro has been passionately practicing for the last 10 years that Our business should not be detached from the evolving climate crisis. So I want you to know that our growth ambition fully incorporates our decarbonization efforts and builds on our ESG roadmap. In the coming days, you will see us make some significant announcement on these trends. More on that later. But now, let me hand over to Jatin for his comments on the financials. Jatin, over to you. Thanks a lot, Thierry, and good morning, good evening to all of you who are joining our earnings call once again. A great pleasure for us to host you. Let me give a brief summary of our performance. As Thierry spoke about, we delivered our quarter 4 in the top quartile of our guidance range at 3%. In reported terms, this was 3.9% sequential. And this comes on the back of 2 good quarters where we delivered in quarter 3% sequential, 3.4% sequential growth and before that 2%. So overall, We are tracking a good trajectory as we complete this financial year. Our operating margin in quarter 4 was 21%, which is compared to 17.6% of quarter 4 of last year was 3.40 basis points up. We feel quite well about the kind of We delivered for the full year 20.3% Operating margin for IT Services and this was a 220 basis point expansion for the full year. I'll speak about ETR. For the full year, our ETR was 21.8%. The ETR was lower in quarter 4 because of couple of tax matters getting settled and we got Some upsides on that, but we delivered 21.8% of ETR in quarter in the full year of 'twenty 1 compared to 20.2 of fiscal 2020. Resultant, Our net income for the full year grew 11% and our EPS growth for FY 'twenty one was 14.6% y o y. Let me speak a little bit about ForEx. We were able to achieve a healthy realization of 73 for every dollar in quarter 4. As we ended the year, we had about $3,200,000,000 of ForEx hedges, of which about 450 $1,000,000 were hedges for certain capital investments we have made in our subsidiaries and are not for the normal inflows for our sales proceeds. So from that perspective, we remain in the range, Our historical range of $2,600,000,000 to $2,800,000,000 but as I said, we have topped it up with certain Capital protection hedges that we have executed in quarter 4. Let me speak about cash flow. In quarter 4, our cash flows were a little lower. As you know, Our DSOs are significantly better in quarter 3 and it they go up slightly in quarter 4. Typically in the beginning of the year, there is a little more time taken to issue fresh POs and by the time You bill against those POs, the collections typically sleep slightly into April what should have come in March. So therefore, Typically in quarter 4, we have a slightly higher DSO compared to quarter 3. So that has one impact. But I'm pleased to say that in this quarter 4, we have improved our DSO by about 8 days compared to quarter 4 of last Yes. So effectively year on year, you would still see a strong improvement in cash collection. Second thing is that we have also because of the bank holidays and a few other things that impact The cash payout, we have paid 4 salaries in India in this quarter. Of course, this doesn't impact P and L in But cash flow does get impacted. So Q4 cash flow has been slightly lower than what we would like. But I'm very pleased to say that for the full year, we have had very robust cash flow generation. Our operating cash flow as a percentage of net income is 137% and our free cash As percentage of net income is 119%. You would have seen that our net Cash net of debt has come down at the end of March and compared to December end. It was $5,200,000,000 in December end, which is $3,600,000,000 at the end of March and that is pretty much reflective of the buyback that we have completed of $1,300,000,000 in the course of quarter 4. Overall, we have a strong balance sheet, healthy P and L and we look forward to FY 'twenty two. We have guided for 2% to 4% as Thierry highlighted in his opening remarks at the constant currency exchange rates that are mentioned as part of our press release. We will be very happy to take your questions from here. Thank you very much, sir. Ladies and gentlemen, we will begin the question and answer session. The first question is from the line of Sudhir Guntupalli from ICICI Securities. Please go ahead. Jatin, just a clarification. Metro AG, any change in the integration timelines? And of the 2% to 4% guidance for June 2021. What is the contribution you're expecting from Metro? Yes. So Sudhir, thanks for your question. We are not breaking out a specific deal or a customer contribution to guidance, but certainly, it's a deal Where the large component of the ramp up, principal component of ramp up is happening from 1st April. Okay. So the ramp up is affected from first April? Yes. Yes. Okay. And my second question is to Thierry. In terms of the deal wins, if you can add further color on the renewals and net new deals Sudhir, so If I look at the performance or, let's say, the activity on the sales front in the organization, one, we've mentioned the fact that if you look at Our top deals are key accounts, our large accounts, if you like. They are driving growth. They are growing faster than the average of the organization, which is what it should be. And so that's a reflection of the fact that In our existing account, we are expanding our position through U. S. Or through new URLs. What we are doing in these accounts is certainly, obviously, reinforcing our position By expanding, leveraging the different solutions and offerings we have inside the organization. So increasing the number of our account that have more than 1 or 2 offerings And from Wipro supporting them. Besides that, we have had a very Solid and strong performance in generation of new opportunities in accounts we don't have In new accounts. And so I would say, frankly, you're right. To be able to drive growth, you really need to walk on 2 legs. We always say you need hunters on one side who are going after new accounts and you need to have farmers who are really growing existing relationship. And what we've seen over the last 6 months is that we've had some good wins Driven from hunters, so in new accounts. But over the last few months, the acceleration in our existing The account has picked up as well. And so that's a reflection of the good activity in the market. Yes. Thanks, Kiri. One last question from my side. It has been some time since you had put the organizational changes into effect And we have seen a lot of leadership additions and changes over the past few months in the organization. So how do you think the Employees of the company are taking these changes in terms of their satisfaction levels about the organizational changes. Any color on that will be helpful. Sudhir, every week, I organize a call with about 25 employees in the organization, Really selected based on their birthday. So it's really people in the organization, oftentimes at junior levels With whom to get a feel, but also obviously connect and know them, but also get a feel for How things are perceived? We are getting a lot of very good return on the direction taken. I think there's a great Level of energy in the system, of ambition as well, and I would say of confidence in the organization. So people are being really warm to the change and to new faces. I would say we have also obviously, as you said, we've onboarded quite a significant Number of senior leaders in our organization in very different roles At the Executive Committee Level 5, new members have joined the team over the last 3 months. And I think What's happening is really positive. On one hand, they're very excited to join Wipro and get to know better the culture and the Use of this organization, the spirit that makes it so special. And but they're also bringing a different perspective, I'd say, From different organizations that they've worked with. And the way they are being welcomed The Wipro organization is really good. I can tell you, very pleased with the way Those new people are integrating very rapidly and very actively in the organization. Sure. Thanks, Kiri. Thanks, Chetan. Congrats on good numbers and all the best for FY 'twenty. Thank you. Thank you, Sudhir. Thank you. The next question is from the line of Ryan Campbell from Wedbush. Please go ahead. Ryan Campbell from Wedbush, your line is unmuted. Please go ahead with your question. Hey, it's Moshe Katri. Can you hear me? Yes. Moshe Katri from Wedbush. A couple of follow-up questions here. First, did you disclose the mix from digital during the quarter and the growth rates there? Moshe, we have not shared that number as part of the communication that we have done? Yes, but let me take that one maybe. So what we feel is that I know that some of the companies continue to report on what is digital or what's not. And what we feel is that it's Becoming a lot more and more blurred, frankly. And so and frankly, we are approaching percentages anyway where it's You know, becoming the majority of the organization. So it's not really serving the way the evolution of technology works. So what we are doing is we have picked more specific offerings that inside, obviously, the space around digital and cloud and so on To really drive high growth. Now to give you a view on the cloud, the cloud business for us, it's about a quarter of the Revenue of Wipro. That's growing double digits, high double digits, right? If you look at security, it's growing double digits. If you look at Digital customer experience, this is growing double digit. So we see that growth everywhere. There is no doubt to your question if I try to read the question is, there is no doubt that the Pandemic has accelerated the transition or the rotation From, I would say, legacy solutions and offerings to Digital and cloud and data. And that's maybe also one of the reasons why we are getting an acceleration of our growth, Frankly, because we are well positioned in this space. Okay. So if I ask the question a bit differently, From your estimates, which part of the revenue base is not growing or actually shrinking at this point? What is what could be shrinking is asset AV infrastructure business that is not In the cloud, that will be non differentiated services because by definition, there is a There would be a cost pressure on these that would weigh on your revenue line. And those services are certainly being rapidly Replaced by cloud data, engineering, security and so on. Okay. And then which part of the bookings for the quarter was actually from renewals? And maybe there's a way to look at this also from an annual perspective for the fiscal year, which part of bookings came from renewals versus new logos? So, Jeff, can you tell me if we have that? But what I can tell you is that The performance in bookings over the last 6 months does not come from, I would say a pickup of renewals, an unusual pickup of renewals versus previous quarters. In fact, not the case. A lot of the growth we've seen is coming from new opportunities We've driven either proactively in our existing accounts or with partners In other accounts. And so frankly, I would tend to feel that At least I would say and I would let you, Jatin, add, but I would say that there is not more there's not a bigger proportion of the bookings In the SEK 7,100,000,000 TCV side, that is coming from renewal than what we would have had typically in the previous quarters. Absolutely, Thierry. I mean, you articulated correct I mean, in terms of the texture of this. And only additional data point, Moshe, is we haven't broken 7 point I mean, we have not broken down this overall TCV that we have booked, but we can talk about The $1,400,000,000 of large deal that we have signed and most of it is new And very little of renewal there to give you color of additional color As to how the business has come. That's great. And then final question for Terry. Since you've announced the Capro transaction, Did you have some more time maybe to look at it? Are you feeling more confident, less confident about the prospects here? And any sort of incremental color will be helpful. Thanks a lot. So Lance, Levy and I are connecting continuously, Okay. We are talking we are obviously impatient to Go through all the different steps to complete the process. We will, by the way, complete the process on time Within the timeframe that we had defined for it. The outlook, I cannot Consider the deal is not done. I need to apply some reservation to the view, but it's positive. I can tell you it's positive. The trend is positive. The opportunities identified To happily connect the Capco and the Wipro sides of BFSI business On specific accounts as being there's a long list. As you can imagine, over the last Man, as we are talking to clients and connecting with them, they are absolutely expressing impatience To start to engage with the capital team and start to really reflect on what it means and how we can leverage our new position and Our capabilities to serve them more. And so to your point, which was Get a sense for the feeling for my level of confidence. 1, I've never no one I mean, we are I know Richard, our Chairman, shared this view as well. From a strategic standpoint, this was absolutely the right thing to do. And second, I think The process leading to the completion of the deal is running well. And third, Everything I've heard in term of momentum and market impact at the moment on the capital side is positive. So Hopefully, soon more to come, but it's an exciting outlook for us. Thank you. Thank you. The next question is from the line of Manik Tanja from J. M. Financial. Please go ahead. Manikarani from JMP Financial. So my question is regarding the supply side environment, while you've spoken about Giving hikes to the senior staff from June, just wanted to get some sense on the I'm sorry, I've not been able to understand your question. It's referenced to the supply side, but can you repeat? Sure. Thanks, Hilli. So my question is with regards to wage hike cycle for the overall staff for FY 'twenty two. Any thoughts on when do we plan to roll out wage hikes for the entire staff? That's question number 1. And the second question was with regards to pricing trends in the market. Just wanted to understand, are you seeing more progression towards Scale based pricing now given the fact that customers have got much more accustomed to offshore delivery? And do you think that will be a margin lever for the industry as a whole over the next few years? Thank you. Okay. So let me take the points, the question to Eltzerab. I'll give you the first one on the compensation evolution, the hike seen In organization. So on the first one, which is the price evolution. So definitely, I think it was very clear At the beginning of the pandemic there, the shock on the overall performance of a lot of Companies in different industries has led them to drive significant cost reduction program here and there. I don't think they have necessarily reduced the spend in 'nineteen. They've certainly asked for efforts and discounts and some 2, at that time, but that was more to help on short term. From an overall spend, I don't think there is going to be a Slow down in if anything, in fact, there's going to be an increase of the spend for technology over the next quarters. Pricing, I would say, what I would say is I have Seeing times where there was a tremendous pressure on price, I don't think we are in this period. I have seen period where But I've never seen a period where there's no normal pressure. So what I would say is, of course, If you're working on solutions that are differentiated, price, client is ready to pay the right price To get the right service because transformation the stake what is at stake in the transformation is a lot More than what they potentially may save a little bit in the technology spend. So I think at the end of the day, to your question, I would say, Yes. There is a pressure on pricing, but not more than what we've seen for many, many years, frankly. And second is, When you own the right offerings, when you provide the right talent, the clients are willing to pay. The clients Want to have the right talent. They want to have the best capabilities you can offer. And that is for sure Requirement. Saurabh, you want to maybe complement that one and take the first one? Sure, Thierry. Thanks, Thierry. So Manik, on your question on overall wage hike for FY 'twenty two, let me explain to you a bit. In Q4, effective 1st January of this calendar year, we have given hikes to 80% of our employees, the junior employees. And for the balanced people, we are doing it effective 1st June, which is a normal cycle In Q1, we are also doing a couple of other things. This is one is that we are doing bonuses for Skill based bonus across the organization for the key skills which are hot skills in the market today, where you want to Expense our employees. So that also we are doing and we will have across the board, across the company Promotion cycle happening in June. So number of interventions are happening for people. As regards to the normal cycle for FY 2022, we have just given it 3 months back. We will call junior employees, we will take a call. As you know, we have called out that Our supply chain will not be a constraint to manage the growth environment. And at an appropriate time, we will take a call when it But our endeavor is to remain competitive and make sure we will influence the right skilled critical and High skilled people in the organization. Hope that answers your question. Thank you for that response. I guess in the press conference you mentioned that The wage hikes that were given by us in December were differentiated and ahead of industry. So just wanted to get some thoughts there. So yes, so what we have given for people in the January cycle, we believe that our Increases for the we have A, we have differentiated our increases based on performance and criticality, 2nd on skill and whatever increase we have given to people are much more aggressive than what we have seen in the industry. That's the point I wanted to make, What we have given to people in January. Does that answer your question, Manik? Yes, sure. Thank you, Saurav. Thank you. Thank you. The next question is from the line of Dipesh Mehta from MK Global. Please go ahead. Yes. Thanks for the opportunity. A couple of questions. First about just want to get a sense about the overall reward And now whether leadership team is in place because last quarter you indicated by Q4 and we will be largely done. So if you can provide some Update on it from leadership team perspective and overall transition is largely behind us. 2nd question on the progress made on Global Account Executing, so Empower Account Manager related thing. That is I think one of the key focus areas of the progress made so far and how we should look that playing out over next few quarters. And the last question is clearly, Peter, and I think you indicated some $7,000,000,000 deal intake for fiscal. So is it comparable with RMB1.4 billion which we announced in Q4 or how one should group that number? Thanks. Okay, Okay, okay. Understood. Understood. So let me start on the first one, which is the organization. So yes, On January 1, we have rotated the organization from a Global sector model with 3 dimension and about 27 P and Ls To an organization by geographies and sectors inside geographies with 4 P and Ls And 2 global business lines supporting those 4 P and Ls. So that's a much simpler organization that has It implied a significant redesign of the organization to work on the processes, to work on the role of everyone And obviously, realign all people, including leadership, to this new model. We had set the objective to be ready by January 1. And what we have said about at the last communication a quarter ago is that we would We will consider that by end of the quarter, we would broadly be done with the transition, if you like. The reality is that we have shifted to the new model on January 1. And we've probably by the end of January, Early February, we've been at pretty much full speed in the new model. So the speed, I'm personally myself, I've been also very impressed by the way the organization has adjusted to this new model. And our leaders jumped into their new role and taken and the reason for the success in my mind is that, 1, there is a clear spirit of WAN WIPRO. So people want to work together and really Share the successes and work together with our clients. 2nd, There is an absolute focus on the market. And from that standpoint, I think it's been a success. We've seen it in the Sales performance month after month. And so as expected, a lot less people, time Spend on internal matters, less internal frictions between silos, less discussion about whose P and L this is, But a lot and maybe also last or not maybe, but also less people focusing on Operations, if you like, and many more of our leaders in the market connecting with clients And focusing on closing deals and delivering deals. So that's on the organization. My view is we are mid of April. The organization change is behind us. Yes, there are here and there things that we need to adjust and improve, but that's absolutely normal. For us, The organization is up and running in the new setup and it's working. Your second point was On the account executive, so the global account executive, the GAEs, the role that we Developed as part of this new operating model on January 1. Here, I would say, certainly, it's a journey because for people, it is a change In the responsibility, in the scope of operations, they have a lot more accountability. They are more accountable in front of the client, but also in front of the company, but then they are given more power to really drive this accountability. I would say the progress have been really good. The fact that our accounts, our large accounts have been driving the growth of the organization in Q4 and we'll continue to do it in Q1 is a positive aspect of that. I want to say one thing also on this account executive, on this GA roll. The reaction, the response from our clients has been very strong as well, very positive. That has definitely helped because when your clients are showing Satisfaction in the way in the change we are implementing internally, it gives a lot more Thanks to the change, and I guess people are it's a lot easier to adjust to it. 3rd is the clarification on bookings. Understood your point. So the $7,100,000,000 Is the TCV performance for H2, so that includes Q3, Q4. And indeed, this is the highest Ever performance in TCV for Wipro in the semester? Okay. Did I respond to all your strict questions? So one clarification on the last So large deal, dollars 1,200,000,000 and $1,400,000,000 and this $7,100,000,000 include everything. That's a one time investment. That's right, the best. Yes. So 2.6 is large TCV and total is 7.1 1,000,000. And this is only for H2 we are saying. We are not setting for full fiscal. That is right. This is only for H2. Okay. Thanks. Thank you. The next question is from the line of Nitin Pangminaban from Investec. Please go ahead. Yes. Hi, good evening and thanks for taking my question. The first question is, would you be able to provide any Can you tell sort of assumptions that you might have in terms of when Capco and Ampeon would sort of We'll begin to revenue or when it would close? We've said before the end of June and it will be before the end of June. So that before the end of the quarter, they will be part of the family. We are confident that there will be part of returning. This is regulation steps, right? So this is also a process where you have to go through different approval process In different countries, not something that we're running ourselves, but it will get completed before the end of the quarter. Sure. Fair enough. And secondly, just wanted to check, looking at I think in the prior quarter when we recorded $1,200,000,000 in deals and I think Metro Nom was 700,000,000 You had suggested that it's you said sort of a deal win that sort of may not be replicable considering we had a large Deane, within that, but this time you have actually sort of delivered RMB1.4 billion. Now going forward, Based on the pipeline that you see, do you think what you've achieved in the first half from these large deals, do you think that's something we should sort of expect So going forward on a consistent basis, is your pipeline and underlying momentum that would allow you to sort of at least be above $1,000,000,000 consistently? This is certainly the objective. This is certainly the objective. That's why we are building this large Steel team across Wipro with very, very tall Talents who will really bring their experience of going in large deals and help us Craft those opportunities of deals and build a bigger pipeline. We have deals in the pipe. And so we may Continue to close several large deals, but it's still not the machine that we want to have That is producing systematically a certain number of large deals per year. And so I think we are still in the acceleration process. We are not there to a point where we say, okay, the engine is working full speed and we will produce X number of deals per period, Okay. So that's the most that's the best answer I can give you. Mr. Padmanabhan, your voice is breaking. Yes, apologies. Is it better now? Yes. Thank you. So when you look at the deals that are out there, is cloud licensing incrementally becoming a larger proportion of deals versus what it was in the prior year? Cloud overall is about A quarter of the business of Wipro and is growing several times more than the average company of the company. So it is going to get a large proportion of our business. Sir, actually sorry, apologies. I was referring to the cloud licensing revenue per se, which is actually split out into the product business. Just trying to understand Now going if you look at the deals out there that are there in the pipeline, is cloud licensing incrementally becoming a larger proportion of The deal structures versus what it was in the past? It is, but I will not differentiate in terms of numbers, but We see that, yes. Sure. That's very helpful. Thank you so much and all the best. Thank you. Thank you. The next question is from the line of Sandeep Shah from Expirus Securities. Please go ahead. Yes. Thanks for the opportunity. Just wanted to understand that in the post 6 months of new organizational level changes, closing 2 mega deals is impressive. So Thierry, just wanted to understand, is it As we see the operational simplification which is driving or is it something else in terms of some flexibility on contractual terms Or other things which is also driving this kind of omega deal wins? No, no, no, no. I mean, It's hard to respond to your question because have we strategically changed Our approach on legal terms or commercial terms, I don't think so. I think it is probably more that we are engaging more Proactively with our clients on large opportunities, just maybe something that we didn't pay enough attention to In the past. And so it's really more the result of us connecting at multiple level with our clients, Leveraging our expertise of the industry and our understanding of their landscape and priorities And really be proactive in crafting these opportunities. That's To me, that's where I see the inflection trend. Okay. This is helpful. So Just to follow-up, how is the mega deal pipeline has been shaping up for you with a more proactive approach with the client as a whole? And Is it resulting into a material increase in your pipeline versus what it used to be earlier? And just a last follow-up question to Jatin. For the Capco sources of finance, any color what proportion could be through debt and what proportion could be through internal accruals? No, we are really looking at all options and we'll finalize what works best for us right now. So we have not yet finalized how What would be the proportion that's the current position? Okay. The first question if you can answer. Yes, yes, yes, yes. So I'm getting there. So On the large deals, so yes, as I said, we certainly see more large deals That are large opportunities than what we were looking at in the pipeline in the last 6 or 9 months. What is certainly clear also is that We are having a lot more CXO engagements with our clients that probably we had before. And I think it's It's evident, it's obvious that these large opportunities are generated In these CXO interactions. And so yes, we are seeing more opportunities in the pipeline. Is the pipeline Big enough yet on large deals? For me, no. That's obviously that's why we are building this big deal team Because I know by experience that we can really take it to the next level and turn it into a very Thematic approach with a strong machine, but it's starting to produce some results because frankly, As you picked out picked up, winning 2 very large deals in a row in 2 quarters Hadn't happened ever, I guess, at least for many, many years in the organization. So I think it's definitely the result of our focus on it in our Go to market activity. Okay, okay. Thanks for this. And if I can just pitch a last question, Jatin, on the margins Entering FY 2022, some portion of weight hikes for seniors still pending For FY 'twenty one, which will come in FY 'twenty two. And on top of it, there would be FY 'twenty two wage hikes. And on top of it, there would be a consolidation So can you give us some sustainable range which we can model for FY 'twenty two? So that would be helpful. Yes, Sandeep. Let me just Share that there is obviously investments that we need to make in talent, and we spoke about it at length in praise and here. We will also continue to make investment in solutions and frontline talent, Creating world class GAEs for organization. So those are the investments we need to make. But we should be also mindful of some of the synergies and the benefits that the growth gets. And growth certainly provides operating leverage on fixed expenses. But more than that, it enables us to Deploy our campus hire faster into projects, rotate our experienced hires Faster into new opportunities. So it is going to be As we go through FY 'twenty two, which would be certainly a very different year than what FY 'twenty one has been. From our commentary standpoint, we do feel that what we had said at the time of our Analyst Day that the range that we were there in, which was around 19,000,000, 19.2%, was something that we believe is sustainable. And there will be, in addition, a dilution of Capco. And the impact on the year will depend on many things, including the day which we consolidate them and sort of synergies that we are able to generate quickly on sales side working together with Cavco. So But we have spoken about the dilution that we'll need to take for the 1st year, not from the profitability of the Of Cavco, but principally the investment that we'll make in terms of management incentive plan as well as some of the Acquisition accounting related intangible charge that we'll have to take. Put together, that 2% dilution is what we see. And our endeavor would be to obviously continue to work hard. You have seen the way we have executed in last few quarters. But right now, these are the 2 Anchors that we have given in past and we would like to stay with those 2 anchors. Just a clarification, you are saying after cap Also, our margin can be close to 19%? No, no, no, Sandeep. My point was that The range that we were operating in, in addition, we will have an impact of Capco. Okay, okay. Thanks. Thanks and all the best. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Ms. Aparna Iyer for closing comments. Thank you all for joining the call today. In case we couldn't take your questions due to time constraint, please feel free to reach out to the Investor Relations team. Have a nice day. Thank you and good night. Thank you very much. Thank you, Bharat. Ladies and gentlemen, on behalf of Wipro Limited, that concludes this conference. We thank you all for joining us and you may now disconnect your